ITC Share Price Crash: Why Your Portfolio (and Your Cigarettes) Just Got More Expensive

The ITC share price just hit a 52-week low following a massive government tax hike. While investors are panicking over a 10% stock plunge, consumers are bracing for a price shock at the "tapri." We break down the new 2026 excise duty rates, the brand-wise price hikes for Gold Flake and Classic, and whether this "blood on the street" is a golden buying opportunity or a signal to exit.

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1/2/20262 min read

The Bloodbath on Dalal Street Yesterday, the markets sent a clear message to ITC shareholders: the party is over—at least for now. ITC shares plummeted nearly 10%, wiping out billions in market capitalization in a single trading session. This wasn't a random dip; it was a direct reaction to the government’s 2026 notification to shift the excise duty structure, effectively slapping a massive tax burden on the tobacco giant.

The Math Behind the Smoke The new tax regime is aggressive. By moving toward a 40% GST and hiked excise duties based on stick length, the government has targeted ITC’s "cash cow" segment.

For the average consumer, this translates to a massive jump in daily expenses. If you smoke Classic or Gold Flake Kings, you are looking at a potential price hike of ₹3 to ₹5 per stick. For those who prefer Marlboro or 84mm cigarettes, the impact is even steeper. The 2026 budget shift aims to curb consumption, but for ITC, it tests the "pricing power" that has made it a retail favorite for decades.

The Brand Impact: Who Hits the Hardest?

· 64mm (Small) Sticks: These saw the highest percentage of tax increase to discourage entry-level smoking. Expect brands like Bristol and Capstan to see the most significant price adjustments.

· 74mm & 84mm (Premium) Sticks: The "Kings" segment will see the highest absolute rupee increase. Classic Milds and Gold Flake Honeydew will likely cross new psychological price barriers, potentially pushing smokers to cheaper alternatives or illicit trade.

Is This a "Buying the Dip" Moment? History tells us that ITC is a resilient beast. Every time taxes are hiked, the stock falls, the company raises prices, and eventually, the margins recover. However, 2026 feels different. With the Hotels demerger still in progress and institutional investors like SBI Mutual Fund trimming their stakes, the volatility is here to stay.

If you are a long-term investor, the current price near ₹360 offers a dividend yield that is hard to ignore. But if you are looking for a quick recovery, beware—the February 1st implementation of these taxes will be the real test of whether volumes can survive these prices.

The Verdict The "Cigarette Sin Tax" has hit home. Whether you are an investor watching the red candles on your screen or a consumer looking at your wallet, the cost of "smoking" has just gone up. Keep a close eye on the volume data in the next quarter; that will tell the real story of ITC’s future.