Shares of Godfrey Phillips India and ITC Limited moved higher after both cigarette makers increased prices across several product categories, passing on the impact of higher excise duties introduced earlier this year.
The latest round of price hikes marks the second increase since the revised tobacco tax structure came into effect in February 2026.
Cigarette prices rise across key brands
According to brokerage reports, Godfrey Phillips raised the price of Pocket Marlboro from ₹70 to ₹85, while ITC increased the price of Gold Flake Superstar from ₹70 to ₹79.
Analysts noted that these products contribute significantly to overall sales volumes, indicating that the pricing revisions could materially affect consumer spending in the segment.
Tobacco stocks trade higher
Following the announcement:
- GODFRYPHLP rose over 1% in morning trade
- ITC gained nearly 1%
Investors appeared optimistic that companies would be able to protect margins by transferring higher tax costs to consumers.
New excise duty regime explained
The revised excise duty framework came into effect on February 1, 2026, under amendments to the Central Excise Act. It marked the first major overhaul of cigarette taxation since the rollout of GST in 2017.
Under the new structure, cigarettes attract additional excise duties ranging from ₹2,050 to ₹8,500 per 1,000 sticks, depending on:
- Cigarette length
- Filtered or non-filtered category
These duties are imposed in addition to GST, which can go as high as 40%, significantly increasing the tax burden on tobacco products.
Premium cigarette segment sees sharpest increase
Premium and longer cigarette variants have witnessed the steepest price hikes as manufacturers attempt to offset rising costs.
Industry observers believe repeated price increases may impact consumption patterns over time, especially in urban premium segments, while also boosting government tax collections from tobacco products.