ITC Q1 results| How to trade in ITC ahead of its first quarter results?

According to experts, ITC is expected to report strong earnings in the first quarter of FY25, driven by revival in rural demand and upbeat performance in its hotel and FMCG business.

ITC's standalone revenues for the June quarter are expected to grow 8-9% YoY to ₹17,000 to ₹17,200 crore. In addition, net profit is expected to grow by 5-6% YoY to ₹5,100 to ₹5,200 crore. The EBITDA margin is expected to improve slightly to 38-39%.

During the upcoming earnings call, investors and traders will be keen to hear management's comments on the spin-off of the hotel business and the recovery in rural demand.

Ahead of the announcement of the Q1 results, ITC shares closed 1.1% higher at ₹495.5 per share and have gained more than 6.5% since the beginning of the year.

Technical View

ITC formed a bullish candle last week after breaking through the trendline resistance that it failed to cross in January 2024. The stock hit a fresh all-time high last week and is witnessing the crossover of its 20 and 50 weekly moving averages. The broader trend for ITC remains positive with immediate support in the 460-480 region.

On the daily chart, the stock is currently consolidating its gains around its recent all-time high and is trading above its key daily moving averages (20 and 50). Positionally, traders are advised to monitor the price action near the recent breakout zone (470 and 480) and plan their strategies accordingly. The stock will face volatility and weakness if it breaches its 20-day moving average on a closing basis.

Options overview

The 29 August expiry's open interest (OI) data highlights significant concentration of call and put options at 500 strike, indicating range-bound activity in ITC around this level. Additionally, there has been an increase in call open interest at the 510 and 520 strikes, indicating potential resistance around these levels.

Before planning strategies, let's examine ITC’s historical price behaviour during past earnings announcements.

Options strategy for ITC

With the options market predicting a price movement of ±5.3% till 29 August, traders can consider long and short straddle strategies to take advantage of the expected volatility.

Disclaimer

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for educational purposes. We do not recommend any particular stock, securities and strategies for trading. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before investing.