ITC Share Crashes 10% After Fresh Cigarette Tax Hike – Market Cap Erodes ₹45,000 Crore

Devendra Patel

7 hours ago

ITC share price today witnessed a sharp sell-off on Wednesday after the government announced fresh excise duty hikes on cigarettes. ITC stock plunged nearly 10 per cent to hit an intraday low of ₹362.70, marking its lowest level since February 1, 2023.

The steep fall wiped out around ₹45,104 crore from ITC’s market capitalisation, which declined to ₹4.59 lakh crore. The development has raised concerns among investors, especially as ITC has over 35.73 lakh small retail shareholders as of September 30.

Why ITC Share is Falling Today

The primary trigger behind the fall in ITC shares is the fresh excise duty hike on cigarettes announced by the government. Under the new structure, excise duty has been increased to ₹2,050–₹8,500 per 1,000 cigarette sticks, depending on the length of the product. These revised rates will come into effect from February 1, 2026.

Brokerages believe higher taxes could:

Hurt cigarette volumes
Force ITC to raise prices sharply
Increase the risk of volume shift to the illicit cigarette market

Brokerage View on ITC

According to Jefferies, the tax hike is a clear negative for cigarette manufacturers like ITC. The brokerage estimates that ITC may need to increase cigarette prices by at least 15% to pass on the tax burden to consumers.

Jefferies also warned that:

The effective tax hike could exceed 30% if NCCD continues
Even if NCCD is subsumed, the impact may still be over 20%
The revised GST on tobacco has gone up to 40%, further increasing pressure

Cigarette Volume Outlook

For the December quarter:

Nuvama estimates ITC’s cigarette volume growth at 5.5% YoY
This compares with 6% YoY growth in the September quarter

The slowing growth outlook has further dented sentiment around the stock.

ITC Shareholding Pattern

Major institutional shareholders in ITC include:

LIC of India – 15.86%
SBI Mutual Fund – 3.26%
ICICI Prudential MF – 2.28%
GQG Partners EM Equity Fund – 2.10%
GIC of India – 1.73%

ITC Share News Today – FAQs & Key Investor Questions

ITC Share News Today

ITC shares crashed nearly 10% intraday after the government announced higher excise duty and GST restructuring on tobacco products, triggering concerns over margins and volumes.

Why ITC Share Is Falling Today

ITC stock is falling due to:

Fresh excise duty hikes on cigarettes
Higher GST slab of 40% on tobacco
Fear of volume decline and illicit trade
Negative brokerage commentary

ITC Share News Dividend

As of now, no new dividend announcement has been made by ITC. The company has a strong dividend track record, but investors are waiting for clarity after recent tax developments.

ITC Bonus News

There is no official ITC bonus issue announcement currently. Any future bonus decision will depend on board approval and business outlook.

ITC Demerger News Today

The ITC Hotels demerger is still awaited. Once implemented, shareholders are expected to receive ITC Hotels shares in proportion to their ITC holdings.

ITC Hotels Share Price

ITC Hotels is yet to be listed separately. The share price will be discovered post-demerger once the company gets listed on stock exchanges.

ITC Share Price Target by 2030

Long-term analysts remain positive due to:

Strong FMCG business
Cash-rich balance sheet
Hotels and agri business growth

ITC share price target by 2030: ₹650–₹750 (long-term view)

Conclusion

The sharp fall in ITC shares highlights how sensitive cigarette stocks are to taxation changes. While the near-term outlook remains volatile, long-term investors will closely watch how ITC manages pricing, volumes and diversification beyond tobacco.

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