Deweshwar sells 90% of his stake in ITC.

ITC Chairman, Y C Deweshwar has sold 90% of his holdings in the company in the financial 2014-15. An indication that the business at ITC is going to slow down and it has got fairly reflected in the stock’s performance. Deweshwar has announced to step down as Chairman of ITC from 2017, and the next suitor for the Chairmanship is said to be Kurush Grant.

The beauty was that, even the incoming Chairman has parred his holdings in the last financial year.

ITC has been losing volumes in its mainstay cigarettes business. As the

duties have been on the rise, which has been increased nearly 300% since 2 years to control consumption of cigarettes, the actual situation is that, the increased duty is not bringing down consumption. In fact there is something unique happening here, foreign brands have begun to get smuggled into India and are available at a lesser price.

In the process of cleaning up the economy, India has been losing around 7000-14000 crores of revenues due to lower consumption of national brands.

ITC stock was a must have in any portfolio. But, today after muted performance numbers and pressure in its FMCG business, it is time to say good bye to this all-time favourite.

We have exited our small exposure in ITC, which we had been holding since long, we have made small gains, but, it is truly not worth writing when compared to the earnings other growth stocks have made in the same period.

Eicher Motors has grown more than 300%, Page Industries has grown more than 200% in the same period and some Mid ca stocks like Hitachi, Ceat, JK Tyres have done triple digit growth. When there is an opportunity to grow our investment in three digits, holding on to ITC with a long term stability and earning near to flat returns will not justify any portfolio.