- ITC lost nearly Rs 1 lakh crore in market value after a 20 per cent stock plunge in a month
- Sharp cigarette tax hike in late December triggered the sell-off and earnings cuts
- New excise duties range from Rs 2,050 to Rs 8,500 per 1,000 sticks with 40 per cent GST from Feb 1
Union Budget 2026 Updates: If you are an ITC investor, you should be following Nirmala Sitharaman's speech today
ITC investors have taken a gut punch. Nearly Rs 1 lakh crore has evaporated from the company's market value in a month as the stock plunged close to 20 per cent after the sharp cigarette tax hike unveiled in late December.
The wipeout has turned this usually dependable defensive giant into one of the hottest budget conversations, with the street desperate for clarity on where tobacco taxation goes next.
The sell-off has been fast and unforgiving because the trigger is pure policy. Cigarettes remain ITC's profit backbone, and the government's decision to overhaul the tobacco tax structure has forced analysts to slash near-term earnings expectations almost overnight.
Under the new regime, excise duties now range from Rs 2,050 to Rs 8,500 per 1,000 sticks alongside a 40 per cent GST from February 1. The jump has pushed the overall tax load sharply higher and reignited familiar fears around shrinking demand, tighter margins and a potential spike in illegal trade.
Most analysts argue the correction says more about the tax shock than about any flaw in ITC's fundamentals. Vincent KA of Geojit Investments says the steep excise hike explains the slide and expects ITC to raise prices in phases to protect profitability, a strategy it has long relied on. But he warns that price actions may hurt volumes until the market adjusts.
With uncertainty swirling around taxation and the stock trading far below its recent highs, Budget day now carries a direct question for investors. Will the government steady the tobacco tax framework or leave ITC navigating fresh volatility in the months ahead?
