Finance Minister Nirmala Sitharaman will present the General Budget on 1 February 2025. During this time, investors will have a special watch on ITC Ltd’s stock in the stock market. ITC is the country’s largest cigarette manufacturer, and its business also includes hotels, FMCG, packaging and agri-business.
This time there is speculation in the market that the government can increase excise duty on cigarettes. If this happens, ITC shares may be under pressure because its main income comes from cigarette business.
Will the excise duty increase on cigarettes in budget 2025?
Market analysts estimate that excise duty on cigarettes may increase by 10%.
- For the last three years, the government has not increased any excise duty on cigarettes.
- Currently, cigarettes with a length of up to 65 mm are at Rs 5 per 1,000 stick excise duty.
- Apart from this, National Calmity Contegency Duty (NCCD) also applies, which ranges from ₹ 230 to ₹ 850 per 1,000 sticks.
- If the tax increases this time, it can be negative news for ITC and it can have a direct impact on the share price.
How was ITC shares perform on the budget day?
Interestingly, in the last 8 years, ITC shares have seen intraday boom.
| Year | ITC shares have intraday bounce (%) |
|---|---|
| 2024 | 1.4% |
| 2023 | 9% |
| 2022 | 4.5% |
| 2021 | 8% |
| 2020 | 10% |
| 2019 | 2% |
| 2018 | 8% |
| 2017 | 5% |
- The highest bounce was seen in 2020, when ITC shares increased by 10%.
- In 2024, the stock was only 1.4% above the budget day, the lowest in the last 8 years.
Analysts’ opinion on ITC stock
The ITC was in the discussion recently due to its demegerger (Demerger). Trading has also started in the shares of ITC Hotels Limited.
- Out of 40, 34 analysts have rated the “BUY” on ITC shares.
- 4 has recommended “Hold” and 2 “Sell”.
