ITC Share Price Jumps Nearly 3% as Strong Cigarette Volumes Ease Tax-Hike Concerns

3 Aug 2026 , 11:22 AM

ITC share price surged nearly 3% on Monday, extending intraday gains of over 4%, after leading brokerages said the company’s resilient cigarette volumes suggest the worst impact of the recent tax hike may be over.

As of 11:20 AM, ITC shares were trading at ₹289.25, up 2.97% from the previous close of ₹281.00. The stock opened at ₹284.45, touched an intraday high of ₹292.55—its highest level since June 23—and slipped to a low of ₹283.00 during the session.

Why Is ITC Share Price Rising Today?

The rally in ITC stock comes despite the company reporting a 27% year-on-year decline in net profit to ₹3,579 crore for the June quarter.

Investor sentiment improved after analysts highlighted that cigarette volumes remained stronger than expected, easing concerns that higher taxes would push consumers toward illicit cigarette products. Brokerages believe ITC’s phased pricing strategy is helping the company retain market share while gradually passing on the higher tax burden to consumers.

Since the cigarette business contributes the majority of ITC’s earnings, signs of recovery in the segment have boosted investor confidence and improved the stock’s outlook.

What Brokerages Are Saying

Several brokerage firms turned optimistic following the quarterly results:

• PhillipCapital believes the June quarter likely marked the bottom for cigarette earnings.
• HSBC expects a gradual recovery as the impact of price hikes reflects in future quarters.
• Jefferies said resilient cigarette volumes indicate strong consumer demand, giving ITC room for further price increases.
• Nomura believes demand has held up better than expected despite the tax hike, reducing concerns over market share loss.
• Dolat Capital expects FY2027 to remain a transition year but forecasts profitability in the cigarette business to recover by the end of the fiscal year.

Impact of the Cigarette Tax Hike

Earlier this year, the government imposed an excise duty ranging from ₹2,050 to ₹8,500 per 1,000 cigarette sticks, in addition to the existing 40% consumption tax. The move was initially viewed as a major negative for cigarette manufacturers.

However, the latest quarterly performance suggests that consumer demand has remained resilient, allowing ITC to gradually implement price hikes without a significant impact on sales volumes.

ITC Share Price Today

Particulars	Value
Current Price (11:20 AM)	₹289.25
Change	+₹8.25 (+2.97%)
Previous Close	₹281.00
Open	₹284.45
Day’s High	₹292.55
Day’s Low	₹283.00

Investor Takeaway

The sharp rise in ITC share price reflects growing optimism that the company’s cigarette business is recovering faster than expected despite recent tax increases. While quarterly profits declined, resilient demand, phased price hikes, and positive brokerage commentary have strengthened investor confidence. Market participants will now watch upcoming quarters for further margin improvement and sustained earnings recovery.

 

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