Cigarette Stocks Plunge: New Excise Duty Hits ITC, Godfrey Phillips Hard on Budget Day

• ITC and Godfrey Phillips India shares experienced selling pressure, falling by about 1% in early trade on Budget day.
• The decline is attributed to a new excise duty on cigarettes, effective from February 1, announced by the government.
• The Central Excise (Amendment) Bill, 2025, passed last December, replaced temporary levies with a sharp increase in duty on tobacco products.
• Excise duty, ranging from ₹2,050 to ₹8,500 per 1,000 sticks based on length, is now levied in addition to 40% GST.
• Brokerage firm Prabhudas Lilladher lowered ITC's target price to ₹314, citing potential volume and profit impact due to increased cigarette prices.

Why It Matters: New excise duty on cigarettes, effective from Budget day, caused ITC and Godfrey Phillips shares to plunge.