Cigarette Tax Hike: ITC, Godfrey Phillips Shares Plunge After Duty Increase

• Government announced a sudden increase in cigarette excise duty, effective February 1, causing a stir in the tobacco sector.
• Shares of major cigarette manufacturers ITC and Godfrey Phillips India plunged up to 5% on Friday, with further significant drops on Thursday.
• ITC's shares hit a 52-week low, wiping out over Rs 50,000 crore in market capitalization; Godfrey Phillips saw its worst intraday decline since November 2016.
• The new excise duty, ranging from Rs 2,050 to Rs 8,500 per 1,000 sticks, is in addition to the existing 40% GST, potentially raising total taxes significantly.
• Analysts warn of "significant negative surprise," potential double-digit price hikes, reduced demand for legal cigarettes, and a resurgence of illicit trade.

Why It Matters: New cigarette excise duty causes sharp stock declines for ITC, Godfrey Phillips, and threatens legal market.