ITC Ltd. and Godfrey Phillips India Ltd. are likely to remain in focus after both companies raised prices of select cigarette brands in the pocket pack category, according to B&K Securities.
Godfrey Phillips increased the price of Pocket Marlboro to Rs 85 from Rs 70, while ITC raised the price of Gold Flake Superstar to Rs 79 from Rs 70, B&K Securities said. The brokerage said these products account for nearly 8-12% of overall sales for the companies.
The latest increase comes as cigarette makers continue to deal with the impact of the government's excise duty hike announced in February. The duty increase led companies to raise prices across segments, with premium cigarettes seeing the steepest jump.
Dealer checks conducted by NDTV Profit in Maharashtra earlier suggested cigarette sales volumes may have fallen around 20% in April, with the premium king-size category seeing the sharpest decline.
The government increased excise duty on cigarettes by 30-40% effective Feb. 1, 2026. The move triggered price hikes across categories, though premium cigarettes recorded the largest increases.
In the king-size category, per-stick prices rose to Rs 25-28 from around Rs 20 earlier. Dealers told NDTV Profit the sharp increase prompted some consumers to shift to lower-priced products, even as the overall smoker base remained largely unchanged.
King-size cigarettes, including ITC's Classic and Gold Flake Kings and Godfrey Phillips' Marlboro, account for a large share of the decline in volumes. The segment contributes more than 30% of revenue for both companies, making any slowdown significant for earnings.
Analysts tracking the sector said cigarette margins could decline by as much as 800 basis points in the first quarter of FY27, depending on the extent of the volume slowdown and any shift towards lower-priced products. Cigarette margins for ITC are as high as 70%.
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