ITC, Godfrey Phillips Share Price Rally Up to 11%: What’s Driving the Jump in Stock Market Today?

The mood in the stock market today turned sharply positive for cigarette makers.

ITC and Godfrey Phillips share price extended their rally on February 18. The reason was simple. Reports of price hikes.

After a painful January, the street finally found relief. And that relief showed up in prices.

Market Performance: Cigarette Stocks Back in Focus

The rally wasn’t mild. It was decisive.

• ITC share price rose 1% to ₹329.95
• The stock gained 5% in three days
• Godfrey Phillips share price surged over 11% to ₹2,297.70
• Its two-day gain stood at 14%
• VST Industries climbed 3%

This comes after a sharp correction in January.

Last month, cigarette stocks had fallen 9% to 26%.

The trigger? A steep excise duty increase announced at the start of 2026.

The sector was under pressure. Investors were worried about margins. They were concerned about volumes. The selling was aggressive.

Now, the trend has reversed.

Main News: Price Hikes Change the Narrative

The shift came after reports that cigarette manufacturers increased product prices.

Why does this matter?

Because the government sharply raised excise duty effective February 1.

Key Excise Data:

• Real price increase impact: Up to 60%
• Revised duty: ₹2,050 to ₹8,500 per 1,000 sticks
• Tax varies based on cigarette length
• Longer sticks face higher taxes

This duty hike had created fear.

Margin compression was the biggest concern.

But companies responded.

They raised prices. And that changes the earnings math.

Earlier expectations suggested EBIT decline of 8–15%.

Now, that impact may be limited to around 2% after price revisions.

That’s the key reason the stock market today rewarded ITC and Godfrey Phillips.

ITC: Passing on the Tax Impact

For ITC, the excise hike impact was not uniform across categories.

The most affected segment:

• 75–85 mm cigarette segment
• Accounts for 16% of total cigarette volumes
• Cost increase impact: 22%–28%

To protect margins, price revisions were necessary.

Segment-Level Pricing Changes

• 84 mm (KSFT segment)
  Price raised to ₹24 per stick from ₹17
• 64 mm cigarette
  Price increased to ₹7 per stick from ₹5.9
• 69 mm Goldflake
  Pricing yet to be officially known
  Expected around ₹12 per stick
  Competing Marlboro stands at ₹11.5

Here’s what stands out.

Premium cigarettes saw sharper price pass-through.

Mass and price-sensitive segments saw more measured increases.

That balance is important.

It helps protect margins without fully hurting volumes.

Godfrey Phillips Share Price: Why the Sharp 11% Surge?

The Godfrey Phillips share price reacted more aggressively.

An 11% intraday move is significant.

A 14% two-day rally signals strong sentiment reversal.

Markets move on visibility.

Once it became clear that cigarette makers were adjusting pricing to offset the duty hike, panic eased.

Investors recalculated.

The worst-case EBIT drop scenario softened.

And that changed positioning.

Why January Was Brutal for the Sector?

To understand the rally, we need to revisit January.

The government announced a sharp increase in excise duty at the start of 2026.

The impact was immediate.

Cigarette manufacturers declined between 9% and 26% in January alone.

The street feared:

• Margin erosion
• Volume decline
• Reduced operating income

Excise hikes directly hit profitability unless companies pass them to consumers.

The uncertainty weighed heavily.

But February brought clarity.

How Price Hikes Support Margins?

Cigarette pricing works differently from many other sectors.

Historically, the industry has shown the ability to absorb tax increases through calibrated price hikes.

Even a low-to-mid single-digit price increase can improve operating leverage.

Why?

Because fixed costs remain stable.

Small price changes flow directly into operating income if volumes hold.

That’s why the market reacted.

The new pricing structure reduces EBIT downside risk.

Understanding the Excise Structure

The revised duty structure depends on cigarette length.

Revised Duty Range:

• ₹2,050 per 1,000 sticks
• Up to ₹8,500 per 1,000 sticks

Longer cigarettes attract higher tax rates.

This is why the 84 mm segment saw a sharper price revision compared to the 64 mm segment.

The structure forced companies to respond category-wise.

They didn’t raise everything equally.

They calibrated.

That strategic adjustment reassured the market.

Stock Market Today: Sentiment Shift Is Clear

In the stock market today, sentiment matters more than noise.

What changed?

• Clear visibility on price hikes
• Reduced risk of severe EBIT erosion
• Signs of margin protection

That was enough for a rebound.

Cigarette manufacturers, which were heavily sold in January, are now seeing selective buying.

The rebound suggests investors believe the tax shock has been priced in.

Company Details Snapshot

ITC

• Share Price: ₹329.95
• 3-Day Gain: 5%
• Key affected segment: 75–85 mm
• Volume share of segment: 16%
• Segment cost impact: 22–28%

Godfrey Phillips India

• Share Price: ₹2,297.70
• 2-Day Gain: 14%
• Intraday Surge: 11%

VST Industries

• Up 3% in trade

All three benefited from the same core development — price hikes to offset excise duty.

What This Means Going Forward?

The ITC share price and Godfrey Phillips share price are reacting not to speculation, but to pricing action.

The excise hike was severe.

The industry response was swift.

Earlier concerns pointed to EBIT contraction of 8–15%.

Now the possible decline narrows toward 2%.

That’s a material difference.

Margins remain under watch.

Volumes remain a key variable.

But the immediate panic has eased.

Summary: Why ITC and Godfrey Phillips Share Price Jumped?

Let’s break it down simply.

• Government raised excise duty sharply effective February 1
• Real price impact up to 60%
• Duty revised to ₹2,050–₹8,500 per 1,000 sticks
• Cigarette manufacturers raised prices
• Earlier EBIT fall feared at 8–15%
• Now impact estimated around 2%

The market recalibrated expectations.

That’s why ITC rose for the third straight day.

That’s why Godfrey Phillips share price surged 11%.

That’s why the stock market today saw fresh buying interest in cigarette stocks.

Sometimes, it’s not about growth.

It’s about damage control done right.

And today, the market rewarded that response.

Source: Livemint