Mumbai: Tobacco sector shares are drawing attention after strong market buzz suggested that ITC Limited could sharply increase cigarette prices across several categories. The expected rise is said to be between 20 percent and 40 percent, depending on the brand and size segment.
The reported move is aimed at offsetting higher input costs and protecting operating margins amid tax pressures and rising compliance expenses. If implemented, this would be one of the steepest pricing revisions in recent years.
Why Prices Could Be Raised
Industry insiders indicate that cost pressures, including taxation changes and raw material expenses, are forcing cigarette manufacturers to revisit pricing strategies. Analysts believe companies are attempting to maintain profitability without severely impacting consumption volumes.
The development has triggered optimism in tobacco counters, as investors expect stronger revenue visibility if higher prices are absorbed by the market without a significant fall in demand.
What Could Be the New Prices?
Market expectations suggest that 84mm cigarettes in the premium KSFT category may rise from around Rs 17 per stick to nearly Rs 24 per stick. This segment reportedly faced higher tax adjustments, which could explain the steep projected increase.
For the 64mm segment, prices may move from roughly Rs 5.9 per stick to around Rs 7 per stick.
The widely sold Gold Flake 69mm variant, currently retailing near Rs 9.5 per stick, is expected by traders to climb to approximately Rs 12 per stick. Meanwhile, competitor Philip Morris International’s Marlboro brand is currently priced close to Rs 11.5 per stick in many markets, which may influence competitive positioning.
The prices mentioned are market estimates based on trade buzz and analyst expectations, and have not been officially confirmed or announced by ITC.
Retail and Market Reaction
Sources suggest that distributors may soon receive fresh stock with revised pricing. In anticipation, some retailers are reportedly adjusting rates on existing inventory.
Global brokerage UBS has maintained a “Buy” recommendation on ITC but trimmed its target price from Rs 420 to Rs 395, reflecting broader market conditions.
