ITC Shares Fall 1% as Cigarette Prices Rise After Excise Duty Hike; Stock Down 26% in 6 Months

Shares of FMCG major ITC Ltd declined 1% in today’s trade to Rs 305.45, after touching an intraday low of Rs 306.35. Over the past six months, the stock has fallen 26.72%, resulting in significant erosion of investor wealth. Following the latest decline, ITC’s market capitalisation slipped to Rs 3.87 lakh crore. ITC shares have been under sustained pressure this year, falling nearly 15% so far in 2026, mainly due to fresh excise duty hikes on cigarettes announced by the government. In the previous session, the stock hit a fresh 52-week low and closed 3.91% lower at Rs 309.60 on February 1, the day the duty hike came into effect. The excise increase, announced earlier this year, has triggered continued selling in the stock.

Adding to the concerns, Union Budget 2026, presented today by Finance Minister Nirmala Sitharaman in Parliament, proposed a sharp hike in the National Calamity Contingent Duty (NCCD) on chewing tobacco, jarda, scented tobacco and related products to 60% from 25%, effective May 2026. This move is expected to remain a major regulatory overhang for cigarette and tobacco companies. ITC shares had earlier fallen nearly 17% during a nine-session losing streak between January 1 and January 13. Reflecting the weak outlook, Prabhudas Lilladher lowered its target price on ITC to Rs 314 from Rs 348, while retaining its ‘Reduce’ rating. The revised target suggests a downside of over 1% from the previous closing price of Rs 318.60. The brokerage remains cautious on the cigarette segment, citing expectations of 22–50% price hikes due to higher excise rates, which could hurt volumes and profitability in the near term.

On the earnings front, ITC reported a 5.8% year-on-year rise in revenue from operations to Rs 19,359.46 crore in Q3FY26, compared with Rs 18,290.24 crore in Q3FY25. EBITDA for the quarter increased 7.6% YoY to Rs 6,271 crore, from Rs 5,828 crore in the corresponding period last year. Along with its quarterly results, ITC announced an interim dividend of Rs 6.50 per share. The company has fixed February 4, 2026, as the record date, while dividend payments will be made between February 26 and February 28, 2026, to eligible shareholders. From a technical perspective, the Rs 325–Rs 320 zone remains a key support level, where the stock is currently attempting to stabilise. A sustained breach below this range could open the door for further downside. On the upside, the earlier breakdown zone of Rs 360–Rs 365 is likely to act as strong resistance.