Stock Market Today: ITC and Godfrey Phillips India share prices declined up to 3% in the morning trade on Thursday amid GST hike concerns. The news reports suggested that the government may be considering a GST hike on cigarettes and other tobacco products.

Tobacco stocks under pressure

ITC share price opened at ₹402 on the BSE on Thursday, 1% lower than the previous close of ₹406.50. ITC share price thereafter declined to intraday lows of ₹396.30, which meant a decline of up to 2.5%.

Godfrey Phillips India share price also opened lower at ₹6478.95 on the BSE on Thursday against its previous close of ₹6560.55. Godfrey Phillips India share price thereafter dipped to intraday lows of ₹6315.30, which meant a decline of more than 3% during the morning trades.

GST hike concerns on tobacco products lead to pressure

A report by The Economic Times suggested that the government after not imposing a compensatory cess on cigarettes and other tobacco products, may think about increasing the goods and services tax on these goods.

The tax hikes on cigarettes and other tobacco product manufacturers had remained key concerns of the street even before the Budget 2025 presentation. While the government did not consider any tax hikes on cigarettes and other tobacco products during the budget, the news reports now again suggest that it may be considering hikes in GST.

No tax changes had been welcomed by analysts after the Budget. 

Jefferies India in a post-budget note had said that ITC comes out as a winner, with the government leaving tobacco taxes unchanged. The GST rates are also likely to stay stable until March 26 when the Centre settles state dues, according to Jefferies. In the context of somewhat tough demand conditions, especially in urban markets, stable taxation improved earning visibility for ITC. 

Jefferies also said that personal tax rate cuts/benefits will help consumption in general and ITC should also be a natural beneficiary, leading them to remain positive on ITC.