Street View: Brokerages bearish on ITC as cigarette tax hike will hit earnings growth

ITC

02/01/2026 03:44

** At least six brokerages, including JP Morgan and Jefferies, downgrade their ratings on ITC's ITC.NS shares as new tax on cigarettes seen hitting earnings growth and weighing on stock multiples

** Stock tanked 9.7% on Thursday to close at its lowest since April 2023

VALUATION MULTIPLES TO RESET AFTER UNPRECEDENTED TAX HIKE

** JP Morgan (downgrades to "neutral", PT cut to 375 rupees) says tax hike to impact volumes, earnings growth and weigh on stock multiples, restricting upside in stock for next 6 to 9 months

** Jefferies (downgrades to "hold", PT cut to 400 rupees) says ITC may need about 40% price hikes to pass on the impact of tax hike, which will impact volumes

** Motilal Oswal Financial Services (downgrades to "neutral", PT at 400 rupees) says such a sharp tax increase is unprecedented and has surprised the brokerage firm given the backdrop of stable taxes over the last few years

** Nuvama (downgrades to "hold", PT at 415 rupees) says a double-digit tax hike could push consumers towards smuggled cigarettes; adds historically volumes have dropped 3%-9% after sharp hike in taxes

 (Reporting by Vivek Kumar M)

 ((VivekKumar.M@thomsonreuters.com;))