ITC, Godfrey Phillips Share Price Rally Up to 16%: What’s Driving Tobacco Stocks in the Stock Market Today?

In the stock market today, cigarette stocks suddenly grabbed attention.

ITC and Godfrey Phillips share price both moved sharply higher on February 18.

There was a clear trigger. Reports of cigarette price hikes across segments.

And the market reacted instantly.

Let’s break down what happened, what it means, and how the move unfolded.

Market Performance: ITC and Godfrey Phillips Share Price Surge

It was a strong session for tobacco counters.

• ITC share price rose nearly 2%, trading around ₹331.50 per share.
• Godfrey Phillips share price jumped about 16%, touching ₹2,389.3 per share.

This rally extended the recent gains seen in the segment.

In a market that has been volatile, especially for cigarette makers earlier this year, this move stood out. The price action wasn’t random. It came alongside news flow around pricing decisions.

In the stock market today, price-sensitive sectors responded quickly to any indication of margin protection. That’s exactly what happened here.

Main Trigger: Sharp Cigarette Price Hikes Across Segments

The real story lies in cigarette pricing.

According to media reports, cigarette makers have sharply increased prices to offset the impact of recent excise duty hikes.

Here’s what stands out:

• Godfrey Phillips reportedly increased the price of Marlboro Compact
  • From ₹9.5 per stick
  • To ₹11.5 per stick

That’s a significant jump per stick.

The increase is aimed at cushioning the impact of higher taxes and protecting profitability per unit.

There were also broader indications that:

• Nearly 50% of ITC’s portfolio may see larger-than-expected price hikes.
• New product launches may carry stronger pricing in the 74 mm category.

The intent appears clear.

Maintain EBIT per stick despite rising tax costs.

ITC Portfolio Pricing: Sharp Increases in Key Brands

Reports suggest that price hikes were not limited to a single SKU.

Specific increases highlighted include:

• Gold Flake and Classic (Premium) – Up by 41%
• Classic Connect (Slims) – Up by 20%
• Gold Flake Superstar (Value segment) – Up nearly 19%

These are meaningful adjustments.

Such pricing changes signal that companies are actively recalibrating their portfolios in response to duty structure changes.

However, the reports mentioned that independent verification was not available.

Even so, the market reaction shows that investors are factoring in improved per-stick realisations.

Excise Duty Hike: The Bigger Background Story

To understand the rally in ITC and Godfrey Phillips share price, we need to step back.

In December last year, Parliament approved the Central Excise (Amendment) Bill, 2025.

This cleared the way for a sharper duty structure on cigarettes and tobacco products.

From February 1, the new excise duty came into effect:

• ₹2,050 to ₹8,500 per 1,000 sticks
• The rate depends on cigarette length.

This is imposed in addition to 40% GST.

That is a meaningful tax burden.

Earlier in the year, cigarette stocks had witnessed strong volatility. The concern was simple:

Higher duties → Pressure on margins → Possible earnings impact.

Now, with price hikes being passed on, the narrative seems to be shifting.

How Pricing Strategy May Reduce Impact?

Reports indicate differentiated pricing tactics:

• In premium cigarettes, price hikes have been fully passed on.
• In more price-sensitive segments like 69 mm and 64 mm, increases were more moderate.

For instance:

• The 84 mm (KSFT) segment may be priced at ₹24 per stick, compared to ₹17 earlier.
• This segment reportedly saw the steepest tax increase.

Such a strategy spreads the burden across the portfolio.

Premium buyers absorb sharper hikes.

Mass segment sees more measured increases.

From a business standpoint, it is a balancing act.

Why the Stock Market Today Reacted Positively?

Markets move on expectations.

In this case, the key takeaway was:

Price hikes may help protect EBIT per stick despite excise increases.

For investors tracking ITC share price and Godfrey Phillips share price, the sharp upward movement likely reflected confidence that:

• Companies are passing on the excise burden.
• Profit impact may be mitigated.
• Pricing power remains intact, especially in premium segments.

In a tax-heavy business like cigarettes, pricing ability is crucial.

And that’s what the market seems to be responding to.

Volatility Context: Not the First Big Move

It’s important to remember.

Earlier this year, cigarette stocks had plunged sharply after the excise changes were announced.

The shift in duty structure replaced a temporary levy on tobacco products.

The uncertainty was high.

Now, with confirmed pricing action in the market, sentiment appears to have stabilised.

The stock market today reflected this change in tone.

Company Overview: ITC and Godfrey Phillips

ITC

One of India’s largest conglomerates with a strong presence in:

• Cigarettes
• FMCG
• Hotels
• Paperboards
• Agri-business

Cigarettes remain a key cash-generating segment.

Any tax or price movement in this division has a direct market impact on ITC share price.

Godfrey Phillips India

A major player in the cigarette industry with brands including Marlboro in India.

Its stock often reacts sharply to pricing changes due to its focused business exposure.

The 16% jump in Godfrey Phillips share price shows how sensitive pure-play players are to margin-related developments.

Stock Market Today: Key Data Snapshot

Here’s a quick recap of the numbers driving the discussion:

• ITC share price: Up nearly 2%, around ₹331.50
• Godfrey Phillips share price: Up around 16%, near ₹2,389.3
• Marlboro Compact price: ₹9.5 → ₹11.5 per stick
• Excise duty: ₹2,050–₹8,500 per 1,000 sticks
• Additional GST: 40%
• Gold Flake & Classic price increase: 41%
• Classic Connect (Slims): 20%
• Gold Flake Superstar: Nearly 19%

Pure numbers.

Clear direction.

Summary: What This Move Means?

In the stock market today, ITC and Godfrey Phillips share price surged following reports of cigarette price hikes.

The backdrop:

• Higher excise duty from February 1
• Pricing adjustments across segments
• Significant hikes in premium categories

The market reaction suggests confidence that companies are adjusting pricing to counter tax pressure.

It’s a story of:

Tax changes → Price hikes → Market re-rating.

For now, the focus remains on how sustained these price revisions are and how volumes behave in the coming months.

But one thing is clear.

In today’s session, ITC and Godfrey Phillips share price firmly stayed in the spotlight.

Source: Moneycontrol