ITC Ltd has implemented another round of cigarette price increases, with Classic Connect 20-pack now priced at ₹428 compared to ₹390 earlier, representing a ₹38 increase or 9.74% price hike. Similarly, Gold Flake Super Star 10-pack has been raised to ₹89 from ₹79, marking a ₹12.66 price increase. According to latest reports from NDTV Profit, dealer checks indicate that cigarettes carrying the revised maximum retail prices have already started entering the market. These latest price revisions represent increases of ₹38 for Classic Connect and ₹10 for Gold Flake Superstar. The latest price hikes come after ITC had indicated it was taking a staggered approach to passing on recent cigarette tax increases, with Chairman and Managing Director Sanjiv Puri stating that the company has passed on 50-60% of recent cigarette tax hikes and will roll out the remaining increases over time. As per CNTV TV18, Puri had noted that the tax increases were "quite severe" and that passing on the entire increase at once could encourage a shift towards illicit products.
ITC shares witnessed calibrated buying during early-morning session on Wednesday, opening higher at ₹259.40 per share on the NSE and touching an intraday high of ₹264.75. As per market reports, the stock gained ₹6.75 during the session to end 2.62% higher at ₹264.75 on September 16. The positive market response comes alongside ITC's latest quarterly results, which showed a 15.6% decline in consolidated profit to ₹4,508.79 crore for Q1 FY27 compared to ₹5,343.41 crore in the same quarter last year. However, the company demonstrated strong revenue growth with revenue from sale of products increasing by 27.82% to ₹29,409.82 crore in the June quarter. Market experts are expressing optimism about ITC's prospects, with some believing there is buzz for an improved PAT and margins in the upcoming quarterly earnings following the price increases. The stock has declined 36% over the past year and is trading close to its 52-week low of ₹256, with recent declines of 14% in 6 months, 10% in 3 months and 3% in the last month.
360 ONE Capital Research maintains a BUY rating on ITC with an unchanged target price of ₹440 per share, implying a potential upside of 65.4% from the current price of ₹266. As per 360 ONE, "We continue to maintain BUY rating on the stock with a target price of ₹440/share (unchanged), on a SOTP basis. Currently the stock trades at a P/E of 15.2x on FY28 basis." The brokerage believes the recent weakness has created an opportunity as the impact of cigarette price increases starts flowing through profitability. "The stock has been range-bound in the last 2 months, driven by uncertainties related to the impact of the recent tax hikes on the overall cigarette volumes. However, we think, in the current industry dynamics, the pricing lever has more weight than the volumes lever, which should offset the decline in volumes that should follow, as the company has been raising pricing in well-known brands consistently in a staggered and phased manner," noted 360 ONE. The brokerage has increased its volume degrowth assumption from -2.5% to -4% for FY27, driven by sharp price hikes, resulting in a Revenue/EBITDA/PAT cut of -3%/-6%/-4%, while increasing FY28 estimates slightly.
The latest price increases follow the implementation of a 40% GST rate on cigarettes and tobacco products from February 1, 2026, alongside a new additional excise-duty structure. According to News18, cigarettes attract additional excise duties ranging from ₹2,050 to ₹8,500 per 1,000 sticks, depending on their length and whether they are filtered. These duties are levied over and above GST of up to 40%, increasing the overall tax burden and retail prices across categories. Longer and filtered cigarettes saw sharper price increases as manufacturers passed on the higher tax costs to consumers. In Q1 FY27, ITC's cigarettes business undertook staggered and calibrated pricing actions following the tax increase, aimed at managing the risk of volume migration to illicit trade while protecting its consumer base. The company also implemented measures to rework its product portfolio across segments and price points, while focusing on execution to improve market responsiveness. 360 ONE expects cigarette net realisation per stick to reach neutrality by Q4FY27 compared with Q3FY26, with EBIT margins improving as successive price increases flow through the business.
In July 2026, ITC Chairman & Managing Director Sanjiv Puri outlined ambitious growth plans, stating that the company expects the FMCG market to expand to around ₹8 lakh crore by 2035. Addressing shareholders at the company's Annual General Meeting, Puri highlighted that the Indian FMCG market was "poised for significant expansion" as the consumer landscape evolves rapidly. The company is leveraging an AI-led consumer insight ecosystem that enables micro-segmentation and supports development of differentiated offerings tailored to evolving consumer needs. ITC is also strengthening its omnichannel capabilities with unique multidimensional capabilities across ambient, chilled, frozen and perishable supply chains. Additionally, on September 1, 2026, shares surged following the announcement that ITC Infotech will merge with Bengaluru-based Happiest Minds Technologies to create an AI-first enterprise with a $1 billion turnover by FY28. ITC Infotech will acquire a 22.1% promoter stake in Happiest Minds for ₹13.3 billion, followed by a 25:81 share-swap merger, with ITC expected to hold around 73.4% of the merged entity.
