Budget 2023: ITC, Godfrey Phillips, other cigarette stocks slide as FM hikes tax by 16%

February 1, 2023, 12:49 IST/1 min read

ITC dropped marginally by 0.4%, while Godfrey Phillips declined as much as 5%. NTC Industries also dropped 1.5%.

Budget 2023: ITC, Godfrey Phillips, other cigarette stocks slide as FM hikes tax by 16%

Union Budget 2023 proposes hike in excise duty on cigarettes by 16%. Credits: Getty Images

Shares of cigarette makers ITC and Godfrey Phillips tumbled up to 5%, in an otherwise positive broader market, after Finance Minister Nirmala Sithraman in her Budget 2023 speech announced a hike in excise duty on cigarettes by 16%. The rise in duty on cigarettes and tobacco products is negative for cigarette makers.

The central government last announced a hike three years ago in FY21, when it increased the National Calamity Contingent Duty (NCCD) by 2-4 times across cigarette stick sizes, resulting in a rise in tax between 9-15%.

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Reacting to the news, shares of ITC dropped marginally by 0.4%, while Godfrey Phillips declined as much as 5%. NTC Industries also dropped 1.5%. Bucking the trend, VST Industries and Golden Tobacco were trading marginally higher.

Meanwhile, the BSE Sensex was trading nearly 1,100 points higher at 60,650 levels, extending early gains, led by capital goods and metal stocks. Among individual stocks, ICICI Bank, Tata Steel, Larsen & Toubro, HDFC Bank, and Housing Development Finance Corporation Ltd. (HDFC).