Budget 2024: ITC Shares Gain As Government Keeps Tobacco Tax Rates Unchanged

Shares of ITC Ltd. surged by nearly 6.52% on Tuesday as the government kept the tax rates unchanged for cigarettes and tobacco products during the Union budget 2024–25 announced by Finance Minister Nirmala Sitharaman. In contrast, shares of its competitor, Godfrey Phillips India Ltd., fell by 3.28% on the NSE.

During her budget speech, the Finance Minister made no changes to tobacco taxation, providing relief to stocks like ITC, which derive a significant portion of their revenue from cigarettes.

In the last quarter, ITC's cigarette business revenue rose by 8%. This relief comes after a 16% increase in the National Calamity Contingent Duty last year.

Shares of ITC closed 6.52% higher at Rs 496.95 per share, as compared to a 0.12% decline in the NSE. Shares of Godfrey Phillip India Ltd. closed 3.26% lower at Rs 4,138 per share, as compared to a 0.12% decline in the NSE.