Union Budget 2023: ITC, other cigarette stocks see a sharp rebound; here is why

The cigarette segment contributes more than 40 percent to the total business for ITC and the rest of the revenue comes from FMCG, paper and hotel businesses.

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ITC shares rebounded sharply from the day’s low to trade with 2 percent gains in the afternoon session on February 1, after analysts assessed the tax hike announced by the Finance Minister on cigarettes is not very high and can be easily passed on to customers.

Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 on February 1.

The stock fell as much as 6.5 percent intraday to hit a day’s low of Rs 329 on the NSE after the FM said the National Calamity Contingent Duty (NCCD) on specified cigarettes is proposed to be revised upwards by about 16 percent.

The NCCD on specified cigarettes was last revised three years ago, the FM said while addressing the Parliament.