Cigarette companies stocks rise: ITC, Godfrey Phillips rise up to 11%; here's why

Cigarette companies stocks rise: ITC, Godfrey Phillips rise up to 11%; here's why

• Godfrey Phillips stock rose 11% after Q3 profit and revenue growth
• ITC stock climbed 5% as Q3 profit and revenue increased
• Excise duty hike on cigarettes took effect from February 1

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Cigarette companies stocks were on the upmove on February 6 with Godfrey Phillips rising over 11% while ITC climbed 5%.

The stocks were trading at their highest level a month after they fell significantly after the Parliament in December approved the Central Excise (Amendment) Bill, 2025, clearing the way for a sharp increase in duties on cigarettes and other tobacco products.

The excise duty would be imposed on cigarettes in addition to a 40% GST, according to an order issued. The finance ministry notified that an excise duty of Rs 2,050–8,500 per 1,000 sticks, depending on cigarette length, will take effect from February 1.

At 12:15 pm on February 6, ITC shares were top Nifty gainer and were trading 4.72% higher at Rs 325 apiece while those of Godfrey Phillips were trading 11.3% higher at Rs 2,207 apiece.

Nearly 13 million shares in ITC traded across 22 block deals on NSE, with 21 deals at premium of 0.6% to 5.4%, LSEG data showed.

Also, cigarette prices have risen sharply after the new excise duty regime came into force, with a pack of 10 sticks now costing at least Rs 22-25 more than earlier.

Price increases vary depending on the length and category of cigarettes. Distributors said premium cigarettes of 76 mm length are now likely to be priced Rs 50-55 higher per pack of 10 sticks, depending on the brand. It should be noted that cigarette manufacturers have yet not formally announce revised maximum retail prices. However, distributors have begun billing existing stock to retailers under the new tax structure, charging 40% GST.

News agency PTI reported that a pack of Wills Navy Cut (76 mm), which earlier sold for Rs 95 per 10 sticks, is expected to be priced at around Rs 120. Cigarettes of 84 mm length-such as Gold Flake Kings and Lights, Wills Classic and Wills Classic Milds-currently retailing at Rs 170 per pack, are likely to cost between Rs 220 and Rs 225.

Godfrey Phillips India Ltd on Friday reported an 8.7% rise in its consolidated net profit to Rs 343.29 crore for the December quarter of FY26.

The company had posted a net profit of Rs 315.84 crore a year ago, according to a regulatory filing from Godfrey Phillips India, the flagship company of Modi Enterprises.

Its revenue from operations surged 15.68% to Rs 2,189.93 crore during the December quarter of FY26. It was Rs 1,893.08 crore in the corresponding period of the previous fiscal.

The total expenses of Godfrey Phillips in the December quarter grew 18% to Rs 1,843.96 crore.

Godfrey Phillips' total income, which includes other income, increased 15.2% to Rs 2,234.51 crore in the third quarter.

Godfrey Phillips India has cigarette brands like Four Square, Red and White, Cavanders, Tipper and North Pole.

It also manufactures and distributes the brand Marlboro under a license agreement with Philip Morris.

The rise in Godfrey Phillips stock comes ahead of results of its promoter Phillip Morris.

Meanwhile, Nifty FMCG index was the top gainer on February 6 with ITC leading the gains with 5.5% jump.

Value buying has emerged in the stock after its Q3 net profit rose marginally to Rs 5,018 crore.

Its revenue from operations rose to Rs 21,707 crore for the third quarter compared to Rs 20,350 crore in the year-ago period, ITC Ltd said in a regulatory filing last month.

Leaf tobacco prices have climbed in recent quarters at a time when export demand has picked up, weighing on ITC's profitability even as cigarette volumes have held up for India's market leader.

Revenue from the cigarettes business, ITC's largest segment, grew 8% in the third quarter. The company's consumer goods segment, which houses popular household brands such as Aashirvaad flour, Sunfeast biscuits and Yippee noodles, grew 11%.

In January, ITC, Godfrey Phillips India, and VST Industries stocks dropped 20.1%, 26.3% and 8.9%, respectively.