Cigarette Prices May Increase Soon in India , Why ITC Share Price is Falling Today ?
ITC Share Fell Sharply on Thursday Morning around 10 % in a Single Trading Session Followed by another Consecutive Fall on Friday ; nearly 4 % , Creating a 52 Week Low , nearly Rs 345.25.
ITC Share Closed around Rs 350 on Friday (2nd January 2026) after 2 Days Consecutive Downfall of Nearly 14 % .
The Sudden Fall has Caught Attention of Many Retail Investors , Since Retail Investors invests Heavily in ITC Share in Faith of Good Return and High Dividends as Delivered in the Past .
What Caused the ITC Share Downfall ?
The New Tax Duty Introduced By the Government of India on Cigarettes has created Panin among Retail Investors. It will Come Into effect From 1 st February 2026. As Per New Policy , the Exice Duty will be Charged Upon Per 1,000 Ciggerates Sticks and Will be Over and Above the Existing GST , Which is Already Nearly around 40 % .
As Per the Notification Released by the Government of India , the Exise Duty Ranges from Around Rs 2,050 to Rs 8,500 Per 1,000 Sticks , depending on the Length of Ciggerate Sticks . This Taxation is Over and Above the Existing GST Rates of Nearly 40 % . The Move has Created a Significant Burden on Cigarette Manufacturing Gaints . This May Result in the Increased Price Of Per Ciggerate Stick by Rs 2 or Rs 3 from the Next Month.
The New Tax Policy has Created Panic Among Retail Investors , Triggering Sell Off’s in the ITC Shares and Creating a Record 52 Week Low. The Market has Reacted Negativity to the Upcoming Tax Slabs . Since ITC has the Largest Exposure in the Tobacco And Ciggerate Industry , the Share Prices Tumbled heavily after the News .
Is It a Buying Opportunity for Retail Investors ?
Many Retail Investors are Cautious about buying ITC Share after the Announcement amid Massive Sell Off’s in the Market. While Many Fear further Decline in the Stock Price in the Following Days there is an another Segment of Investors which Keeps on Buying on Every Dip , Seeing the Past Performance and Dividend records.
ITC Shares has a Solid Past Record in FMCG Industry For Delivering Good Returns to the Retail Investors. Due to its Monopoly in Cigarette Industry and Company Solid Bussiness Model , ITC has Gained Faith of Investors in the Long Run.
The Future Price of the Shares Depends on how ITC manages to Cut Down the Per Unit Cost of Ciggerates and how Retail Consumers React towards increased Prices after February 2026.
In the Short Run, Stock may remain Volatile as Market awaits more Clarity from ITC Management. But For a Term – Perspective , Srong Cash In Flow , Non Ciggerate Bussiness like FMCG , Agricultural and Hotel Industry gives a Significant Support to ITC and Strong Balance Sheet gives a Positive Outlook of the Future.
Downgrade Alert
6 Major Brokerage Firms has Downgraded the Ratings of ITC
MOTILAL OSWAL has Downgraded the Ratings from Buy to Neutral with Target Price of Rs 400 Calling it an “Unprecedented Tax Hike”.
NUVAMA INSTITUTIONAL EQUITIES also Downgraded Ratings of ITC from BUY to HOLD with Target Price of Rs 415 Per Share.
CENTRUM and MOSL Brokerage Firms are now Both Neutral on the Stock with Target Price Ranging between Rs 390 to Rs 400.
EKMAY GLOBAL FINANCIAL SERVICES Downgraded ITC Ratings to REDUCE from ADD with Target Price of Rs 350 From Rs 475.
J P MORGAN Also Downgraded ITC Ratings to Neutral, highlighting the hike as “UNPRECEDENTED TAXATION BLUES” with Target Price of Rs 375 from Rs 475.
JEFFERIES Downgraded ITC from BUY to HOLD, reducing its earning estimates by 15% and Predicted the Stock Could remain Volatile under pressure and ITC Management may Opt towards lower Ciggerate Lengths.
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