ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolizes its heritage:
ITC operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Hotels: Luxury chain including ITC Hotels.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non-cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
Recent charts show a downtrend accelerating post the tax news:
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494-535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring in recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
(Word count: 1028)ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolizes its heritage operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Hotels: Luxury chain including ITC Hotels.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non-cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
Recent charts show a downtrend accelerating post the tax news:
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494-535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
(Word count: 1028)ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolises its heritage:
ITC operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Hotels: Luxury chain including ITC Hotels.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non- cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
Recent charts show a downtrend accelerating post the tax news:
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494- 535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring in recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady Dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolises its heritage:
ITC operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non-cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
Recent charts show a downtrend accelerating post the tax news:
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494-535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring in recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
(Word count: 1028)ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolizes its heritage:ITC operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Hotels: Luxury chain including ITC Hotels.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non-cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
Recent charts show a downtrend accelerating post the tax news:
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494-535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
(Word count: 1028)ITC Share Price Analysis: Sharp Decline Amid New Excise Duty Hike (As of January 2, 2026)
ITC Limited, one of India’s leading diversified conglomerates, has been in the spotlight at the start of 2026 due to a significant drop in its share price. On January 1, 2026, the first trading day of the year, ITC shares plummeted nearly 10%, closing around ₹363-364, marking a 21-month low. This article delves into the current share price scenario, the reasons behind the fall, the company’s business overview, historical performance, analyst views, and future outlook. (Word count: ~1050)
Current Share Price and Recent Performance
As of January 1, 2026, ITC shares closed at approximately ₹363.85 on the NSE and BSE, down 9.71% from the previous close of ₹403. This represented the stock’s worst single-day performance in years, with intraday lows touching ₹362.70—a 52-week low. Trading volumes surged dramatically, with over 282 million shares changing hands, reflecting intense selling pressure.
The decline erased around ₹45,000 crore in market capitalization in a single session, bringing ITC’s total market cap to roughly ₹4.55-5.05 lakh crore. Year-to-date in 2025, the stock had already fallen about 12%, marking its first negative annual return since 2020.
Key Trigger: Government Excise Duty Hike on Cigarettes
The primary catalyst for the sharp fall was the Finance Ministry’s notification imposing a new tax structure on tobacco products, effective February 1, 2026. This includes an effective 40% GST on cigarettes, tobacco, and bidis, subsuming existing excise duties and the National Calamity Contingent Duty (NCCD). Excise duties were revised to ₹2,050-8,500 per 1,000 sticks, depending on cigarette length.
Analysts estimate this could increase costs by 22-28% for popular 75-85 mm segments. Brokerages like Jefferies suggest ITC may need to hike cigarette prices by at least 15% to offset the impact, potentially affecting volumes in a price-sensitive market. Longer cigarettes (>75 mm), comprising ~16% of ITC’s volumes, could see price rises of ₹2-3 per stick.
Additionally, a large block deal involving over 4 crore shares (0.3% equity) at ~₹400 per share, worth ₹1,614 crore, added to the negative sentiment.
Other tobacco stocks like Godfrey Phillips India fell up to 19%, highlighting sector-wide pressure.
Overview of ITC Limited
Founded in 1910 as Imperial Tobacco Company of India, ITC has evolved into a diversified FMCG giant. Its iconic logo symbolises its heritage:
ITC operates across multiple segments:
- Cigarettes: The core profit driver, contributing ~48% of revenue in recent quarters. Brands like Gold Flake dominate the legal market.
- FMCG Others: Rapidly growing non-tobacco FMCG portfolio with over 25 mother brands, including Aashirvaad atta, Sunfeast biscuits, Bingo snacks, Classmate notebooks, and Savlon hygiene products.
- Hotels: Luxury chain including ITC Hotels.
- Paperboards, Packaging, and Agri-Business: Strong contributors to revenue diversification.
Despite cigarette dominance, ITC has aggressively expanded non- cigarette FMCG, which now forms a significant growth engine. The company boasts steady cash flows, high dividend yields (~3.5-3.9%), and a robust balance sheet.
Historical Performance and Stock Charts
ITC has been a long-term compounder, delivering solid returns over decades, though 2025 saw pressure from stake sales by British American Tobacco (BAT), FMCG sector corrections, and the ITC Hotels demerger.
The stock’s P/E ratio stands around 13-14, below historical averages, indicating potential value.
Analyst Views and Price Targets
Pre-drop, analysts were largely positive, with targets around ₹494- 535 (up to 17% upside from earlier levels). Post the excise hike, views are mixed—some see short-term pain but long-term resilience due to diversification.
Brokerages note ITC’s ability to pass on costs historically and gain from illicit market share. Long-term targets for 2026-2030 range from ₹500-700 in optimistic scenarios, factoring in recovery in consumption and FMCG growth.
Experts recommend holding for patient investors, citing limited downside below ₹370 and steady Dividends.
Future Outlook
The excise hike poses near-term challenges: potential volume slowdown, margin pressure, or downtrading to cheaper/illicit products. However, ITC’s strengths—brand power, distribution network, and diversification—position it well for recovery.
Moderating inflation, rural demand revival, and government focus on consumption could aid non-cigarette segments. Upcoming Q3 results (expected late January) will be crucial.
In summary, while the January 1 plunge reflects tax fears, ITC remains a defensive stock with strong fundamentals. Investors should monitor price pass-through and volume trends post-February. For long-term holders, this dip could present a buying opportunity in a quality compounder.
