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ITC is considering another round of price hikes

ICICIdirect Research 22 Jun 2026 DISCLAIMER

News: As per media reports, ITC is considering another round of price hikes. It expects to hike prices to the tune of 8-10% across price packs.

View: The price hike by ITC would be the 4rd round of price hike since the increase in tax levy in January 2026. The company had already taken first round of price hikes in February followed by a 17% price hike across select products in May 2026 and 3rd hike of ~13% on certain select product . The government had announced significant increase in the tax rate on cigarettes in the range of 20-55% (depending on various sizes) in January 2026. The total price hike taken by the company now stands at ~42-45%. It has already taken more than 50-60% of the required price hike to mitigate the overall increase in taxes. The company continues to pass on the impact in one go rather than passing it on in a staggered manner. In Q4FY26, the business reported moderation in volumes (as per our calculation) to 4-5% vs expectation of 6-7% due to the price hikes taken. As per our expectations, the substantial increase in prices can have impact on the volumes of ITC’s cigarette business in H1FY27. As prices stabilise, we expect the volumes to start recovering from H2FY27.

Impact: Neutral

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