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ITC, Godfrey Phillips shares up by 7%: What's the reason?
29 Apr 2026

Shares of ITC and Godfrey Phillips surged today after reports suggested a possible 17% hike in cigarette prices from May.

The price revision is expected to cover not just premium products but also value-end brands sold by both companies.

At the time of writing, ITC shares were up by 4% while Godfrey Phillips's stock jumped by 7.4%.

Nifty FMCG index gains 2%
Market impact

The anticipated price hike would see Goldflake Premium's pack price increase to around ₹135 from ₹115 in May, as per distributor feedback.

This news has led the Nifty FMCG index to trade 2% higher, with ITC leading the gains.

Earlier this year, cigarette stocks took a hit after Parliament passed the Central Excise (Amendment) Bill, 2025, paving way for steep hikes in duties on cigarettes and other tobacco products.

Cigarette companies have historically displayed strong pricing power
Future outlook

Vinod Nair, Head of Research at Geojit Investments Limited, had said earlier this year, "While higher retail prices could temporarily weigh on volumes, cigarette companies have historically displayed strong pricing power, allowing them to protect profitability even in elevated tax regimes."

He added this would allow them to protect their profitability even in elevated tax regimes.

The expected price hike comes amid reports of weakened sales in April after the government raised excise duty from February 1.

Premium products see sharper hikes
Price adjustments

Following the government's 30-40% excise duty hike, manufacturers adjusted prices across categories.

Premium products saw sharper hikes than lower-priced segments.

In the king-size category, per-stick prices reportedly rose to ₹25-28 from around ₹20 earlier.

This led some consumers to shift toward cheaper alternatives while keeping the overall smoker base broadly unchanged, according to dealer feedback.