Cigarette Price Hike: Major setback for Cigarette lovers. ITTC Limited has once again increased the prices of specific cigarette brands, causing a surge in the company’s shares by nearly 3% to Rs 265 on Wednesday. Analysts have provided their predictions for the stock. Let’s delve into the details.
Price Increase of Cigarettes
– The maximum retail prices (MRPs) of Classic Connect and Gold Flake Super Star cigarette brands have gone up.
– A pack of 20 Classic Connect cigarettes now costs Rs 428, up from Rs 390, marking an almost 10% increase.
– The price of a 10-cigarette pack of Gold Flake Super Star has risen from Rs 79 to Rs 89, a more than 12% increase.
– Starting February 1st, the GST rate on cigarettes and other tobacco products increased to 40%, along with a new additional excise duty structure. Consequently, ITC and other cigarette manufacturers raised prices to offset the higher tax burden.
ITC shares experienced notable buying activity in the morning session on Wednesday. Opening at Rs 259.40 per share on the NSE, the stock quickly reached an intraday high of Rs 264 and closed at Rs 264.15, up by 2.38% from the previous day. Mahesh M Ojha, VP of Research and Business Development at KC Securities, attributed the rise in ITC’s share price to the recent price hikes of specific cigarette brands, anticipating an improvement in the company’s profits and margins in the upcoming quarterly results.
Anuj Gupta, a SEBI-registered market expert, highlighted ITC’s robust financial position, further strengthened by the price adjustments of certain brands post the correction in the Indian stock market. Gupta mentioned a resistance level for the stock between Rs 265 to Rs 268, suggesting a potential 10% upside if this resistance is surpassed in the short term.
Mahesh M Ojha recommended existing ITC shareholders to hold the stock with a stop-loss at Rs 248. A breakthrough above Rs 268 could trigger a significant rally, possibly pushing the share price to Rs 290 soon. New investors were advised to buy ITC shares above Rs 268, targeting Rs 290 in the short term, with a strict stop-loss at Rs 255.