FMCG index falls 4% in two days to hit nine-month low as ITC's m-cap erodes by Rs 72,000 crore

• ITC shares hit 52-week low, falling over 14 percent in two sessions.
• FMCG index drops to nine-month low after excise duty hike on cigarettes.
• Excise duty and cess changes impact tobacco and pan masala stocks.

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ITC share price fell for the second consecutive session on Friday after the government notified amendments to the Central Excise Act, dragging the FMCG index to a nine-month low.

The stock declined 5.11 percent to an intraday low of Rs 345.25, which was also its 52-week low. Over the last two sessions, ITC shares have fallen more than 14 percent.

The company’s market capitalisation has declined by over Rs 72,000 crore to Rs 4,38,075.08 crore on January 2 compared to its closing level on January 31, ahead of the government’s decision on excise duty hike effective February 1.

Heavy selling in ITC weighed on the Nifty FMCG index, which slipped over 1 percent during the session. It was the only sectoral index in the red among the Nifty indices on Friday.

In the last two sessions, the FMCG index has declined over 4 percent. It touched an intraday low of 52,741.85 on Friday, its lowest level in nine months since March 21, 2025, when it had fallen to 52,670.60.

FMCG Index Declines 

Other FMCG stocks also came under pressure. Radico Khaitan fell up to 3.55 percent and United Breweries declined 0.97 percent. Nestle India, United Spirits, Marico and Godrej Consumer Products slipped up to 1 percent.

ITC Shares Crash Reason

On Thursday, ITC shares had tumbled 9.69 percent to close at Rs 363.95 after the finance ministry notified amendments to the Central Excise Act, imposing excise duty of Rs 2,050 to Rs 8,500 per 1,000 sticks based on cigarette length, effective February 1. The duty will be over and above 40 percent GST.

The ministry also notified the Health and National Security Cess Act, levying cess on manufacturing capacity of pan masala-related businesses from February 1. The total tax incidence on pan masala, including 40 percent GST, will remain at 88 percent.

The revised tax structure replaces the existing regime of 28 percent GST along with a compensation cess on tobacco and related products.

Shares of Godfrey Phillips India fell 4.58 percent to Rs 2,184.60 on Thursday and declined another 2.07 percent to Rs 2,243.10 on Friday. VST Industries dropped 2.56 percent to Rs 248.60 on Thursday and extended losses on Friday, falling 1.66 percent to Rs 251.25.

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