ITC has spent decades trying to become more than a cigarette company. Yet cigarettes remain its most profitable business, and the business that keeps putting it under pressure.

This February, the government increased cigarette taxes by 20–55%, depending on the cigarette’s length. The hike was steep enough to risk pushing smokers towards illicit, untaxed cigarettes. The bourses read it as a hit to ITC’s earnings: its share price has fallen 28% so far in 2026. In comparison, the Nifty FMCG index has declined 16% over the same period. 

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