The scrip of the cigarette major was up by 1.62% at Rs 710 on the BSE, off its high of Rs 721.80. A substantial volume of over 2 lakh ITC shares was recorded by 12:55 IST. In the last three sessions, the scrip has risen by 6.6% from Rs 666 on 14 May 2003. In the last two months, it  has risen by 18% from Rs 602 on 25 March 2003.

Dealers said institutions are  accumulating the stock on the reckoning that the company's new businesses are doing well. Expectations of impressive quarterly results, which are slated on 23 May 2003 have also generated interest in the stock.

As per market buzz, a Mumbai-based operator is believed to be mopping up  the ITC stock. Brokerages like Salomon Smith Barney, Kotak Securities and PL Securities were also said to be active buyers on the ITC counter last week.

Meanwhile,  for Q4 ended 31 March 2003, analysts expect ITC to record a net profit of Rs 330-365 crore, up 15-27.5% on sales of Rs 1,470-1,520 crore, up 6-10%.

ITC has diversified into lifestyle and food ventures. There were rumours that the company is now planning to open up lifestyle franchises abroad. ITC has also moved into other businesses like atta (flour), biscuits and confectionery. Recently, ITC merged ITC Bhadrachalam Paperboards with itself.

Analysts said it is the core cigarette business that will lead the company's growth in the near future. But the lifestyle and food segments are also considered high potential. The company has recently hiked the prices of certain cigarette brands. And, despite the recent legislations against cigarette smoking, reports suggest that demand for cigarettes has actually increased.

The government's legislations against cigarette advertisements and sponsorships of cultural and sporting events by cigarette companies may even prove beneficial to the company, some analysts believe, as the company used to spend inordinately high amounts over these activities. Also, the legislations will restrict promotions made by foreign brands in India. Foreign cigarette makers were in fact looking at India as a major market for expansion of late.
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The Union Budget for 2003-04 has also proved favourable to the cigarette sector (in an indirect way), by not going in for the customary hike in excise duty on tobacco products. ITC is a dominant player in the cigarette segment with a 66% market share.

For the third quarter ended 31 December 2002, the company recorded a 21.8% rise in net profit to Rs 323.51 crore (Rs 265.63 crore) on a 22.8% jump in net sales to Rs 1,467.6 crore (Rs 1,195.20 crore).

As on 31 March 2003, institutions and the public held 48% and 14% stake in ITC respectively.