ITC slides 15% in two days as cigarette excise hike triggers Nuvama downgrade to 'Hold'
A sharp cigarette excise duty hike (BED to Rs 4,000 per 1,000 sticks) lifts tax incidence 30%+, forcing ITC to eye a 20% price increase from Feb 1. Nuvama cut its target to Rs 415 from Rs 534 and multiple to 17x from 23x, citing volume compression and illicit-market migration (23% share). FMCG foods, paperboards and a 4% dividend yield cushion downside.
ITC shares fell ~15% after a sharp cigarette excise duty hike; Nuvama downgraded to 'Hold' with Rs 415 target. FMCG foods, paperboards and dividend yield cushion downside despite feared volume compression and illicit-market migration.