ITC Share Price Analyzed

ITC’s stock price dipped by 1.4% today, reaching ₹398.50 on the NSE, despite a positive overall market trend. This means the stock went down by ₹5.10 during the trading session. It was trading at ₹399.80 at 09:23 AM, while the Nifty 50 rose by 0.32%. This decrease is significant because ITC hit a low of ₹390.15 on April 7, 2025.

Key Points

• ITC stock dropped 1.4% to ₹398.50 on Monday.
• ITC fell 5% in the last month, while Nifty 50 rose 2.2%.
• ITC’s year-to-date decline is 17%, compared to Nifty 50’s 9% rise.
• New government bills could impact cigarette taxes, causing uncertainty.
• ITC remains a market leader, but faces high taxation challenges.
• Analysts predict resilient cigarette earnings and FMCG profitability growth.

The primary reason for today’s drop is likely related to upcoming government legislation. The Central Excise Amendment Bill and the Health Security and National Security Cess Bill are expected to replace the current Goods and Services Tax (GST) compensation cess on tobacco products like cigarettes and pan masala. This change is crucial because the current compensation scheme is ending.

Currently, a 28% GST plus a compensation cess creates a 50-55% tax on cigarettes. The government wants to tax these “demerit goods,” which are considered unhealthy. This shift could affect ITC, a major player in the cigarette market. While some reports suggest the change won’t significantly alter tax rates, the uncertainty is impacting investor confidence.

ITC is a large consumer goods company with a diverse portfolio, including FMCG, hotels, packaging, and agri-business. Despite a heavy tax burden, ITC has maintained its market leadership and has delivered solid financial results. Analysts at Nuvama Institutional Equities remain optimistic, expecting cigarette earnings to remain strong and FMCG profitability to continue to increase. They have a ‘Buy’ rating and a target price of ₹534.

“Ultimately, ITC’s success depends on adapting to changing regulations and continuing to innovate within its diversified business segments.”