ITC Ltd Share Price Hits 52-Week Low After Excise Duty Hike On Cigarettes; 7 Analysts Cut Target, Time To Buy?

FMCG giant ITC Ltd share price continued to bleed for the second consecutive session on January 2nd, after the Centre hiked excise duty on cigarettes and other tobacco-related products. On Friday, ITC nosedived to hit a 52-week low of Rs 345.35 apiece, recording a more than 5.1% decline. This comes after ITC plunged nearly 10% in the previous session. ITC holds leadership in the cigarettes and tobacco segment, which is why the company is expected to take a huge blow due to the latest excise hike.

Many global brokerages have downgraded their outlook on ITC while trimming target prices. Currently, ITC trades at 3-year low.

ITC Ltd Share Price:

At the time of writing, ITC share price traded at Rs 349.15 apiece, down by 4.07% on BSE, with market cap of Rs 4,37,448.63 crore. In the early deals, the stock hit a new 52-week low of Rs 345.35 apiece. Currently, ITC is struggling to maintain Rs 350 levels.

In the previous session, ITC plunged by nearly 10%. In a span of two sessions, ITC share price has dipped by over 14%.

It needs to be noted that ITC shares have been under pressure in the past seven days.

Excise Duty Hike On Cigarettes:

As the world celebrated New Year's eve, the last day of 2025, Indian Finance Ministry shocked the cigarettes and tobacco industry by revising excise duty on these products. As per the notification, cigarettes will be charged with excise duty ranging from Rs 2,050 to Rs 8,500 per 1000 sticks. This will come into effect from February 1, 2026.

Notably, the latest excise duty hike is in addition to 40% goods and services tax (GST) rate that has been applied on cigarettes, tobacco, pan, and other similar products.

How Excise Duty Hike On Cigarettes Will Impact ITC?

According to analysts at Religare Broking, ITC is set to face near-term margin and volume pressures following the government's notification of new excise duty on cigarettes, effective February 1, 2026. This follows the passage of the Central Excise (Amendment) Bill, 2025, which replaces the earlier temporary levy with a formalised excise structure.

For ITC, the analysts highlighted that the impact is most pronounced in the 75-85 mm segment, which accounts for 16% of cigarette volumes. Also, costs in this category could surge by 22-28%, implying potential price hikes of Rs 2-3 per stick to protect margins.

Also, ITC's cigarette portfolio spans multiple segments (

"While the duty hike may weigh on near-term earnings due to price-led volume moderation and margin absorption, cigarette demand in India has historically been inelastic," added analysts at Religare.

They believe that ITC is likely to offset the impact over time through calibrated price increases, product mix optimisation, cost efficiencies and scale benefits.

Additionally, analysts added that the growing contribution from non-cigarette FMCG, hotels and agri-business provides earnings diversification.

Overall, these analysts said, "the new excise regime may impact near-term profitability and sentiment, but ITC's strong pricing power and diversified business model should support medium-to-long-term earnings resilience."

Finally, they said, "We will reassess, earnings assumptions and valuation once the company outlines its pricing and mitigation strategy."

ITC Share Target Price Cut:

Both global and domestic brokerages have downgraded their rating on ITC. These include Nomura, Morgan Stanley, JPMorgan, Jefferies, Motilal Oswal, Kotak Institutional Equities, and Nuvama.

- Nuvama downgrades to HOLD from earlier rating of BUY. The target price has been trimmed to Rs 534 from Rs 415.

- Motilal Oswal lowered rating to Neutral from BUY, with target price reduced to Rs 400.

- JP Morgan has downgraded rating to NEUTRAL from BUY. The target price is lowered to Rs 375 from Rs 475.

- UBS has also reduced its target price to Rs 430 from Rs 490, however, this brokerage has maintained its BUY rating on the stock.

- Unlike other brokerages, Nomura double-downgraded its rating on ITC to REDUCE from BUY. The target price has been cut sharply to Rs 200 from earlier Rs 340.

- Morgan Stanley lowered its rating to Equalweight from its earlier rating of Overweight. The target price has been chopped to Rs 366 from Rs 469.

- Further, Kotak also trimmed its rating to REDUCE from ADD, with target price now seen at Rs 350 from Rs 480.

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