Higher taxes on cigarettes won’t have any impact on Elitecon International! Here’s the big reason

Mumbai (Maharashtra) [India], January 2: The government's latest move to raise taxes on cigarettes has rattled the entire tobacco space. As soon as the news hit the street, stocks of cigarette and tobacco product makers came under pressure, with investors quickly pricing in higher costs and the risk of demand taking a hit. But amid this sell-off, there is one company that looks far less exposed than the usual tobacco names. In fact, the impact on this stock could stay neutral, and in some scenarios, even turn positive.

That company is Elitecon International Ltd.

The key difference is simple: Elitecon is export-first
Elitecon's business model is largely export-led. And that single factor changes the entire tax equation. In India, tobacco exports are treated as zero-rated under GST. That means exports attract zero GST, and the company operates under the LUT and refund mechanism. In plain terms, even if GST rates on cigarettes and tobacco move up domestically, it does not automatically squeeze Elitecon's earnings or margins the way it does for companies dependent on Indian cigarette consumption.

Why the new excise duty and cess matter less here
The new excise duty and cess are primarily aimed at domestic consumption. Export shipments do not fall under this bracket. So while domestic cigarette players may be forced to either raise prices or absorb the cost, exporters like Elitecon remain far more insulated from the immediate shock. That's why, when the market panicked, the pain was sharper for India-focused cigarette businesses and comparatively less relevant for an exporter-led model.

A potential second-order benefit: exports could get a boost
Brokerages and industry trackers believe that higher taxes in India could reduce cigarette demand in the domestic market. If that happens, part of the tobacco leaf supply and processing capacity could shift towards exports. That shift can benefit companies already positioned strongly in foreign markets. Better availability of raw material and improved competitiveness in pricing can create fresh opportunities for exporters. For Elitecon, this is not a new direction — it is already the core playbook.

What the market did to the big names
The divergence is already visible. While Elitecon has been seen holding up better in comparison, ITC and Godfrey Phillips India came under pressure as the market reassessed the impact of a higher tax burden on domestic cigarette volumes and profitability. This is exactly where Elitecon's export positioning stands out — it is not fighting the same battle.

Export visibility strengthened by a big contract
Elitecon's export-focused approach has also been supported by large deals. In December 2025, the company secured a two-year export contract worth USD 97.35 million with Yuvi International Trade FZE. Deals like these improve revenue visibility and reinforce its footprint in overseas markets.

Share price snapshot
As of 12:08 PM, Elitecon International was trading on the BSE at ₹98.04, down 4.30% or ₹4.40. In another recent session, the stock rose 2.40% to an intraday high of ₹104.90 from its previous close of ₹102.44. The stock's 52-week high stands at ₹422.65, while the 52-week low is ₹10.17.

Elitecon is also expanding beyond tobacco
Another angle investors are tracking is diversification. Elitecon has been pushing into FMCG-linked segments by acquiring majority stakes in Landsmill Agro and Sunbridge Agro, building presence in categories like edible oils and snacks. This adds another engine beyond tobacco exports and helps reduce regulatory dependence over time.

The 2026 tax reset has created a clear split in the tobacco universe. Domestic-heavy players now face a tougher pricing and demand equation. Elitecon, by contrast, looks like a “policy-insulated” export play — and if domestic pressure redirects supply towards exports, it could even find itself in a stronger position than before.

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