ITC Shares Climb as GST Reforms Spark Optimism for FMCG Sector

On September 3, 2025, ITC share price rose over 3% and touched the day high of ₹425.70 at 11:45 AM after opening at ₹422.00 on BSE.

The gain in ITC share price was backed by sweeping changes in the Goods and Services Tax (GST) structure, despite a sharp increase in the sin tax rate, from 28% to 40%. As per various analysts, a key shift in GST application, which will now be levied on the Maximum Retail Price (MRP) rather than the earlier transaction value, a move that could have significant implications for pricing strategies.

Key Highlights Include

• GST rate cuts from 18% to 5% on essential FMCG items such as instant noodles, sauces, pasta, processed vegetables, herbal extracts, talcum powder, hair oil, shampoo, and toothpaste.
• A similar reduction from 12% to 5% on popular snack items like namkeen, bhujia, and other pre-packaged foods, butter, and ghee.
• A drop in GST from 12% to 5% on select stationery products, including pencils and stationery kits (boxes, pouches, compendiums, etc.), which is expected to benefit ITC’s education and stationery business.

The policy revisions are likely to drive domestic consumption and promote long-term capacity building, especially important in today’s globally uncertain environment as per MOFSL, noted by Business Today.

ITC Q1FY26 Earnings Highlights

Despite facing a challenging operating environment, the Company demonstrated strong resilience and delivered a solid performance during the quarter. Gross revenue reached ₹20,911 crores, marking an impressive year-on-year growth of 20%. Profit Before Tax (PBT) came in at ₹6,545 crores, while Profit After Tax (PAT) stood at ₹4,912 crores. Earnings Per Share (EPS) for the quarter was ₹3.93, a slight increase from ₹3.86 in the corresponding period last year.

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