MOFSL stays Neutral on ITC at Rs 300 as GST 2.0 squeezes cigarette economics
Motilal Oswal flags 60-65% tax burden hike under GST 2.0 forcing ITC into phased ~35% MRP increases, risking FY27 cigarette revenue down 15% and EBIT down 19%. Non-cigarette FMCG, compounding at 10% CAGR over FY19-26, remains the structural bright spot cushioning the call.
MOFSL maintains Neutral on ITC with Rs 300 target, citing pressure on cigarette business after GST 2.0 hiked tax burden 60-65%. ITC is raising prices in phases to curb illicit market shift; non-cigarette FMCG remains a bright spot.