Opinion: ITC will bounce back after Q3 results on 29th

I believe the market has overreacted to the cigarettes tax hike. ITC has now had the worst month in 20 years, which says something. Analysts predict a 5-13% drop in volume of sales. Yet the share price has fallen more than 21%. I know this is simple math and there are other factors as well which I will explore. 1. The shortening strategy: the tax hikes are non-linear as the size increases. After 65mm of length, the tax suddenly increases by 70-90%. For >70mm it is the same story. BUT, Itc has a time tested strategy of reducing the size such as of 69mm to 64 mm. They have navigated the past hikes using these strategies successfully. This has also been documented in use by smaller players like VST Industries. They have to thicken the cigarette to have the same level of tobacco in the shortened stick as to provide the same level of "hit". None of these are hard for a company of ITC's caliber. If ITC successfully executes these strategies, the volume dip is likely to be less than 5% as seen in previous price hikes. Overall, this does 2 things, protecting the margin as well as encouraging people not to go down to illicit Cigs or Bidis as price will rise only by a little. 2. The FMCG Diversification: The market seems to have conveniently forgotten that ITC has a heavy presence in the FMCG others such as packaged food items, deodorants, soap/shampoos, etc. Also, include the Agri business. These portions contribute significantly towards the top line, albeit only 22% to the bottom-line(profits). This FMCG has a major boost from the GST cut back in September which hasn't been realized yet. 3. The Hotel king: ITC successfully demerged ITC hotels from the main company. Yet, they still own 40% of it. Hotels sector is currently in an upcycle, and ITC hotels has recently posted remarkable quarterly numbers. The profits from ITC hotels can seen in the investments portion of their PnL. I tell you, 40% of a great hotel business, currently in an upcycle and posting growth is not a factor to ignore. Now, why do I think the stock will have a bounce only after the Q3? This is because the management will reveal their outlook and their possible strategies to counter this taxation. At that point, the market will realize they have beaten ITC too bad. I will participate in the call myself, first time for me. I hope they do show their strategies in the call, part of my bet is on this action from them. I have personally bought at 322 lvls, will buy more if it goes till 315. Stop loss is probably 310 for me, in case they fail to be effective in their concall update.