Penny stock under 10 rupees: Elitecon International share price hit 5% upper circuit in Thursday’s trading session despite downward rally in the Indian stock market. The stock opened at ₹9.35 apiece today, as compared to previous close of ₹9.14 on Wednesday and touched an intraday high of ₹9.59 on 24 September.
Elitecon International shares extended their upward momentum for the fifth consecutive session on Thursday. The stock hit the upper circuit for the second straight day.
Meanwhile, Indian benchmark indices opened sharply lower as investors reacted to the US 10-year Treasury yield climbing above 5.10%. Both Sensex and Nifty began the session with a gap-down opening, with the Sensex dropping more than 500 points and the Nifty slipping below the 23,300 level.
What’s behind the rally in Elitecon International share price?
According to company’s latest press release, the stock rally came in amid ITC’s latest cigarette price increases which has sharpen the bullish case for Elitecon International.
“A higher retail pricing benchmark could give an alternative manufacturer greater scope to compete for customers, improve product positioning and build a more profitable domestic business. The opportunity is not simply to follow prices higher. It is to turn a changing competitive landscape into incremental sales and stronger unit economics,” the release said.
Dealer checks reported on September 23 indicate that ITC’s Gold Flake Premium has moved from ₹125 to ₹135 for a 10-cigarette pack, an 8% increase. Earlier in September, Classic Connect rose from ₹390 to ₹428 for a 20-cigarette pack, while Gold Flake Superstar increased from ₹79 to ₹89 for a 10-cigarette pack.
For Elitecon, the investment argument is that this repricing could create a more attractive opening wherever its products offer consumers a credible, competitively priced alternative.
If Elitecon is able to maintain a meaningful price advantage even after factoring in taxes and other costs, it could become more attractive to price-sensitive adult consumers without having to fully match the price increases implemented by competitors.
This could create two potential avenues for value creation. Keeping prices relatively stable could help the company attract new customers and support volumes, while selective price hikes could improve net realisations without eliminating its affordability advantage. The right approach would likely vary across products and markets, but the broader opportunity is for Elitecon to compete on value rather than simply follow an industry-wide pricing cycle.
Elitecon International describes itself as a tobacco manufacturer catering to both domestic and international markets, with cigarettes forming part of its product portfolio and a manufacturing facility in Nashik. This gives the company an operational base to pursue the opportunity. However, the extent of overlap with the affected ITC brands, as well as Elitecon’s current retail price advantage, would need to be independently verified.
“For the bull case, however, the commercial logic is compelling: a higher competing price benchmark could give Elitecon more room to win customers, optimise pricing and expand its domestic business,” it said.
Elitecon International share price performance
Elitecon International’s stock has shown a sharp rebound in the short term, gaining 23.32% over the past week. However, the recent recovery comes after a steep decline in the preceding periods, with the stock down 37.16% over one month.
On a broader timeframe, the stock has witnessed significant selling pressure. Elitecon International shares have declined 81.58% over six months, while the year-to-date loss stands at 90.66%. Over the past year, the stock has fallen 95.55%.
Despite the recent weakness, the stock has delivered substantial gains over longer periods. The stock has risen 239.36% in two years and surged 811.43% over five years.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
