Key facts
- ITC shares fell 3% to a fresh 52-week low on Wednesday.
- The decline was driven by investor reaction to steep tax hikes on cigarettes under the new GST 2.0 regime.
- The revised tax framework will increase cigarette taxes by approximately 60-65% for ITC.
- The new tax framework is effective February 1, 2026.
- Motilal Oswal Financial Services maintains a cautious outlook on the stock.
ITC shares experienced a 3% decline, reaching a fresh 52-week low on Wednesday. This downturn was attributed to investor reactions to substantial tax increases on cigarettes, implemented under the new GST 2.0 regime. Motilal Oswal Financial Services, a brokerage firm, expressed caution regarding the stock. They highlighted that the revised tax framework, set to take effect on February 1, 2026, will result in approximately a 60-65% increase in cigarette taxes for ITC. The firm anticipates further challenges for the company due to these tax changes. Motilal Oswal also warned that ITC has not yet passed on the full tax burden.