ITC, Godfrey Phillips Stocks: Major cigarette companies like as ITC and Godfrey Phillips India have started the new year on a weak note after the government
announced higher taxes on tobacco products, effective February 1, 2026. Both stocks have come under heavy selling pressure amid talks of impact on volumes and profitability due to higher taxes. ITC, the country’s largest cigarette maker, generates more than 45 per cent of its revenue from cigarette business. It is followed by Godfrey Phillips in terms of market share. In just two trading sessions on January 1 and 2, ITC shares have declined 13 per cent and are currently trading at a three-year low. The counter closed 3.78 per cent lower on NSE at Rs 350.10 on January 2. Godfrey Phillips saw a steeper fall, correcting nearly 19 per cent in the period. The stock closed at Rs 2,250 on NSE, down 1.77 per cent on NSE. Speaking to ET NOW Swadesh, Kunal Parar, Vice President at Choice Equity Broking, advised investors to stay away from ITC and Godfrey Phillips for now. He said that the counters are under pressure due to the higher taxes imposed by the government on tobacco products. "Whenever taxes have been hiked, whether it is GST or any other duty or any other tax, these stocks have always faced selling pressure and corrected. But after that, these stocks have stabilized and then shown a good recovery,” he said.
ITC Stock
According to Parar, multiple downgrades on ITC have also weighed on the sentiment. All the downgrade numbers that are coming, keeping all the development in the view, "I will suggest stay away but keep it in your watchlist.”
Parar said ITC stock could correct further before offering a buying opportunity. “I feel that ITC stock, which is currently around Rs 350, this stock can try to stabilise in the range of Rs 340 to Rs 320. And if it comes between this zone, I will advise adding fresh positions for investment,” he said.
He noted that ITC is a fundamentally strong company and the impact of just one of its verticals will not pose any big challenge to the balance sheet.
“ITC is a fundamentally strong company, it is a diversified company, so we cannot see much damage in this stock due to the impact of one business,” Parar said.
Godfrey Phillips Stock
On Godfrey Phillips India, the analyst said that the stock has seen a steep correction in line with selling in ITC stock.
“Godfrey Phillips is trading in line with ITC. Godfrey Phillips' structure is also looking a little weak,” he said, adding that the stock has corrected nearly 20 per cent in just two sessions.
Parar expects further downside in Godfrey Phillips before it stabilises. “Godfrey Phillips can fall up to Rs 2,010. I expect the counter to stabilise in the range of Rs 2,080 to Rs 2,010. If Godfrey Phillips shows the levels of Rs 2,000 - Rs 2,010 in the worst scenario, that will a perfect level to buy. The bounce back from Rs 2,000 can take Godfrey Phillips to 3,000,” he said.
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(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
