ITC’s shares have taken a significant hit, falling to an eight-month low of Rs 396.30. This decline comes after reports suggested the government plans to increase the Goods and Services Tax (GST) on cigarettes. Since the announcement of the Union Budget 2025-26 on February 1, ITC’s stock has declined by 14%. In comparison, the BSE Sensex fell by 2.3% and the FMCG index dropped by 10.3% during the same period.
Analysts believe that the higher taxes on cigarettes could negatively impact ITC’s sales volumes. However, they also note that the recovery in rural and urban consumption might help support the company’s growth. The increased tax burden is likely to put pressure on ITC’s profitability, but the company’s diverse product portfolio and strong presence in the FMCG sector could provide some resilience.
Despite the current challenges, some market experts remain optimistic about ITC’s long-term prospects. They argue that the company’s strong brand recognition and extensive distribution network will help it navigate the impact of the increased taxes and market volatility.
In summary, ITC’s shares have dropped significantly post-budget, but the company may still find ways to recover and grow in the long run.
