Major tobacco companies ITC Ltd and Godfrey Phillips India saw their share prices rise by up to 2% in afternoon trading today. This surge followed reports that ITC had implemented its second price increase for Gold Flake Premium cigarettes this year, a move aimed at offsetting higher taxation.
Gold Flake Premium Sees Double-Digit Price Jump
The latest hike, effective this September, pushed the price of a 10-cigarette pack of Gold Flake Premium from Rs 125 to Rs 135, an increase of approximately 8%. This follows an earlier 8.7% rise in June, when the same pack went from Rs 115 to Rs 125.
Cumulatively, the price of a 10-cigarette pack of Gold Flake Premium has now increased by 17.4% this year, starting from Rs 115 and reaching Rs 135 currently. This strategic pricing adjustment is a direct response to the government's decision to raise cigarette taxes.
Market Reaction and Tax Context
In response to the news, ITC's stock climbed 1.94% to Rs 266.45, with a market capitalization of Rs 3.37 lakh crore. Godfrey Phillips also experienced a boost, with its shares rising 2.18% to Rs 2017.10, up from its previous close of Rs 1973.90.
These price adjustments by cigarette manufacturers are largely attributed to the Modi government's tax reforms. Effective February 1, 2026, the old compensation cess structure was replaced, increasing the core Goods and Services Tax (GST) on cigarettes from 28% to 40% of the retail price. Despite today's gains, both ITC and Godfrey Phillips stocks have faced headwinds this year, falling 26% and 13% respectively, largely due to the increased tax burden.