Godfrey, VST Industries, ITC — Tobacco Stocks Tumble On Fear Of Possible GST Hike On Cigarettes
Currently, cigarettes and other tobacco products have a 28% GST levy, among others.
Shares of Godfrey Phillips India Ltd. and VST Industries Ltd. took a hit during trade on Monday, after reports of a potential hike on GST on cigarettes. The move may follow the removal of compensation cess.
Currently, cigarettes and other tobacco products have a 28% GST levy, among others. The total tax burden of the commodity stands at 53%. One of the options being considered by the government is to increase GST to 40%, which is the highest permissible slab, and add an excise duty on top of that, Economic Times reported.
Share price of Godfrey Phillips saw significant decline of over 6%, while VST Industries shares fell nearly 3%. ITC Ltd. stock was trading flat.
Godfrey Phillips Share Price
Godfrey Phillips stock fell as much as 6.82% during the day to Rs 5,391.8 apiece on the NSE. It was trading 6.11% lower at Rs 5,433 apiece, compared to a 1.01% decline in the benchmark Nifty 50 as of 10:31 a.m.
It has risen 4.02% in the last 12 months. Total traded volume so far in the day stood at 1.7 times its 30-day average. The relative strength index was at 71.56.
The only analyst tracking the company has a 'sell' rating on the stock according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 5,340, implying a downside of 2.2%
VST Industries Share Price
VST shares fell as much as 2.96% during the day to Rs 270.4 apiece on the NSE. It was trading 2.48% lower at Rs 271.75 apiece, compared to a 1.01% decline in the benchmark Nifty 50 as of 10:36 a.m.
The stock has fallen 19.17% in the last 12 months. The total traded volume so far in the day stood at 1.8 times its 30-day average. The relative strength index was at 46.48.
The only analyst tracking the company has a 'sell' rating, according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 327, implying a downside of 20.1%.
ITC Share Price
ITC Ltd. stock was trading flat at Rs 401.35 apiece, compared to a 0.97% decline in the benchmark Nifty 50 as of 10:48 a.m.
It was down 16.93% in the last 12 months and the relative strength index was at 14.8.
Thirty five out of 40 analysts tracking the company have a 'buy' rating on the stock, three recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 511.8, implying an upside of 27.5%.
Despite these stock movements, it is important to note that cigarettes fall under the giffen goods category. This means that people buy more of these commodities even when the price increases.
