ITC Ltd. and Godfrey Phillips India Ltd. have increased prices of select cigarette brands in the pocket pack category as the industry continues to deal with the impact of higher excise duty and slowing premium segment volumes.
Godfrey Phillips raised the price of Pocket Marlboro to Rs 85 from Rs 70, while ITC increased the price of Gold Flake Superstar to Rs 79 from Rs 70, according to B&K Securities. The brokerage said these products contribute around 8-12% of overall sales for the companies.
The latest hikes come months after the government increased excise duty on cigarettes by 30-40% effective Feb. 1, 2026, triggering price increases across categories. Premium cigarettes saw the sharpest jump in prices following the tax increase.
Dealer checks conducted by NDTV Profit in Maharashtra earlier suggested cigarette sales volumes likely declined around 20% in April, with the premium king-size segment recording the biggest fall.
Dealers told NDTV Profit last month that per-stick prices in the king-size category increased to Rs 25-28 from around Rs 20 earlier. The increase has led some smokers to switch to lower-priced alternatives, though the overall consumer base has remained largely unchanged.
The king-size category includes ITC's Classic and Gold Flake Kings brands and Godfrey Phillips' Marlboro cigarettes. The segment contributes more than 30% of revenue for both companies and remains among the highest-margin categories for cigarette makers.
Analysts tracking the sector said cigarette margins could contract by up to 800 basis points in the first quarter of FY27, depending on the extent of the fall in volumes and any shift in consumption towards cheaper products. Cigarette margins for ITC are as high as 70%.
Stocks of ITC and Godfrey Phillips are likely to remain in focus as investors assess the impact of repeated price hikes on demand and profitability in the premium cigarette segment.
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