ITC, Godfrey Phillips Shares Experience 6.5% Gain Amid Report of Potential 17% Cigarette Price Hike in May

Cigarette Stocks See Sudden Surge Amid Report of Price Hikes

Cigarette stocks experienced a significant boost on April 29, with ITC and Godfrey Phillips shares rising up to 6.5%. According to a report by NDTV Profit, channel checks indicated that the companies are planning to hike prices by 17% next month. This move is expected to affect not only premium products but also value-end brands sold by both companies.

At 1:10 pm on April 29, ITC shares climbed 4%, while Godfrey Phillips gained 6.5% as investors reacted to the news. The report cited feedback from distributors, which suggested that the pack price of Goldflake Premium could rise to approximately Rs 135 from Rs 115 in May 2026.

The recent price hike announcement comes after a turbulent period for the stocks. Earlier this year, the Parliament approved the Central Excise (Amendment) Bill, 2025, paving the way for a significant increase in duties on cigarettes and other tobacco products. The finance ministry subsequently issued an order imposing an excise duty of Rs 2,050–8,500 per 1,000 sticks, depending on cigarette length, effective from February 1.

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The excise duty, in addition to the existing 40% GST, is expected to translate into a 22-28% increase in overall costs for 75-85 mm cigarettes, according to analysts at ICICI Securities. They noted that cigarettes longer than 75 mm account for roughly 16% of ITC's volumes and are likely to see price increases of 2–3 rupees per stick as a result of the levy.