ITC Cigarette Prices Hiked 30%, Volume Impact Seen Limited
ITC Ltd has raised cigarette prices across its premium brands, including Gold Flake and Classic, by roughly 30%, slightly below Nomura’s expected 35–40% increase. The brokerage noted that while this may cushion volume decline, it could weigh on margins and overall growth if further hikes are not implemented later in the year. ITC has been the worst-performing BSE200 stock in 2026, falling 20% so far.
Nomura retained its ‘Reduce’ rating on ITC with a target price of Rs 318, forecasting flat EPS growth over FY26–28F. The brokerage highlighted that staged price hikes, along with portfolio strategies like shrinkflation and new variants, aim to mitigate potential volume loss. Examples include the Gold Flake Deluxe variant, priced similarly to the Regular size, to encourage volume migration.
The report also compared ITC with competitors, noting Godfrey Phillips raised prices by up to 90% for its Stellar Shift brand. Nomura said the shift toward margin-focused strategies could reduce competition in the premium Slims segment, although illicit and imported brands remain challenging at significantly lower price points.
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