ITC Share Price Falls Further as Excise Duty Shock Continues to Hit Investor Sentiment; Stock Down by 14% In Five Days

FMCG major ITC continues to face strong selling pressure after the government announced a steep hike in cigarette excise duty. The stock slipped to its lowest level in 3 years, marking a rough start to 2026 for investors. In just two trading sessions on January 1 and 2, ITC shares have declined 13 per cent and are currently trading at 348 against the previous close of 350. Speaking to ET NOW Swadesh, Kunal Parar, Vice President at Choice Equity Broking, advised investors to stay away from ITC for now. He said that the counters are under pressure due to the higher taxes imposed by the government on tobacco products. "Whenever taxes have been hiked, whether it is GST or any other duty or any other tax, these stocks have always faced selling pressure and corrected. But after that, these stocks have stabilized and then shown a good recovery,” he said.

According to Parar, multiple downgrades on ITC have also weighed on the sentiment. All the downgrade numbers that are coming, keeping all the development in the view, "I will suggest stay away but keep it in your watchlist.” Parar said ITC stock could correct further before offering a buying opportunity. “I feel that ITC stock, which is currently around Rs 350, this stock can try to stabilise in the range of Rs 340 to Rs 320. And if it comes between this zone, I will advise adding fresh positions for investment,” he said. He noted that ITC is a fundamentally strong company and the impact of just one of its verticals will not pose any big challenge to the balance sheet.“ITC is a fundamentally strong company, it is a diversified company, so we cannot see much damage in this stock due to the impact of one business,” Parar said. The stock of ITC has seen a decrease of 13.14% in returns over the past week, highlighting the pressures faced by the company in the current market landscape.

The sudden decline in ITC's share price led to large notional losses for three major government-owned insurance companies. Life Insurance Corporation of India (LIC), which owns 15.86 per cent of ITC, witnessed the value of its stake falling from Rs. 80,028 crore on December 31 to Rs. 68,560 crore on January 2. This amounts to a notional loss of Rs. 11,468 crore. General Insurance Corporation of India (GIC), with a 1.73 per cent stake, lost Rs. 1,254 crore, while New India Assurance Company, holding 1.4 per cent, saw a decline of Rs. 1,018 crore. Together, these three insurers lost Rs. 13,740 crore in just two days.The selloff also wiped out Rs. 72,000 crore from ITC's total market value, which now stands at Rs. 438,639 crore. Global brokerage, Jefferies has also downgraded ITC to Hold citing concerns over cigarette volume growth and margin pressure.