Synopsis: ITC and Godfrey Phillips are facing challenges as cigarette sales fell by up to 5% in March 2026, due to a sharp GST increase to 40%. Retail prices have risen across various segments, especially in the important “mini king-size” category. Investors are considering how immediate drops in demand will affect long-term profit margins in India’s tobacco industry.
On April 10, 2026, shares of ITC Limited and Godfrey Phillips India attracted attention after reports showed a notable drop in cigarette sales volumes post-GST hike. Retail prices increased significantly mid-segment packs jumped from Rs 170 to Rs 240, lower-end variants went from Rs 80 to Rs 120, and premium brands rose from Rs 340 to Rs 480 per pack. Sales suffered the most in East India, a major market for ITC, with mini king-size cigarettes experiencing the steepest decline.
Cigarette sales volumes decreased by 5% in March 2026, and early April data indicates that weakness continued after the GST hike to 40%. The biggest declines occurred in East India and the price-sensitive mini king-size segment.
While higher retail prices boost revenue per unit, analysts caution that ongoing drops in demand could strain overall profit margins. Additionally, uniform price hikes throughout the organized sector might push consumers toward illegal, untaxed options, posing a risk to the long-term market shares of listed companies.
Despite a 5% volume slump, tobacco stocks showed resilience as Godfrey Phillips surged 3.14% to ₹2,098.60 and ITC held steady at ₹304.15, with investors betting that aggressive price hikes will protect margins. While high tax costs have been successfully passed on to consumers, shareholders remain wary that premium pricing could permanently shift market share toward the illicit tobacco segment.
Companies Oveview
ITC Limited is India’s largest cigarette manufacturer and a diversified FMCG conglomerate. Godfrey Phillips India is the country’s second-largest cigarette maker, marketing international brands domestically. Both companies derive significant revenue from the tobacco segment.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post ITC and Godfrey Phillips Shares Under Pressure as Cigarette Sales Drop Up to 5% Post GST Hike appeared first on Trade Brains.