The stock is less than 3% away from its record high of Rs 273 touched on February 28, 2015 in intra-day trade.

In past one month, the stock of fast moving consumer goods (FMCG) company has outperformed the market by surging 17% as compared to 5.5% rise in the S&P BSE Sensex.

Prabhudas Lilladher expects gradual and sustained recovery in ITC’s cigarette business as it has been able to successfully crack the 64mm segment which now accounts for 30% of its volumes.

"Relatively inelastic demand and 20% volume decline in the past three years, makes it ripe to grow steadily in coming years. Non?cigarette businesses like Paper, Hotel etc. are at the bottom of the cycle and should increase contribution in coming years", the brokerage firm said in Q3 results preview.

“ITC’s cigarettes business growth was impacted in earlier quarter due to confusion over larger pictorial warnings and due to price hikes initiated after the budget. As per our channel checks, its business has stabilised and volume growth for ITC’s cigarettes business is expected to be flattish in Q3FY17 in spite of demonetization,” analysts at Philip Capital said in consumer sector update.

JP Morgan expects consumption to remain under pressure in the near term, though the foreign brokerage firm is hopeful of gradual improvement over the course of 2017 as the demonetization-led impact on the wholesale channel (accounting for 30-40% of staple company sales) wanes.

“However, we note several key developments which will be crucial to shape the growth trajectory for consumption demand over 2017 include GST implementation and the government's policy making ahead of a politically packed calendar,” JP Morgan said in recent report on Asia Consumer Outlook 2017.

Revenue growth rates should be much better in 2H17 aided by a weak base of Dec-16 (impacted by demonetization-led channel destocking for staples and end consumer demand hit by the discretionary channel), added report.