ITC Up By 9% in 2 Days Government Keeps Tobacco Tax Unchanged

The Union budget for 2024-25, presented by Finance Minister Nirmala Sitharaman, brought significant movements in the stock market With the announcement of no changes in the tax rates for cigarettes and tobacco products, ITC Ltd. experienced a notable surge in its share price, The stock of ITC Ltd. has scaled new 52-week high of Rs.510.65 today.

Market Reactions to Unchanged Tobacco Tax Rates

On Tuesday, ITC Ltd shares surged by nearly 6.5% following the government’s decision to keep tax rates unchanged for cigarettes and tobacco products. This announcement during the Union budget 2024-25 was welcomed by investors, providing a significant boost to ITC’s stock. The stock has continued its yesterday’s rally and is up by more than 2% today.

Impact on ITC’s Financial Performance

The Finance Minister’s decision to maintain the current tobacco tax rates came as a relief for ITC Ltd., a company that derives a substantial portion of its revenue from cigarette sales. In the last quarter, ITC reported an 8% increase in revenue from its cigarette business, a growth now expected to continue without the burden of additional taxation. 

This relief follows the previous year’s 16% increase in the National Calamity Contingent Duty, which had posed a significant challenge for the company.

ITC Ltd. Touched New 52-week high

ITC Ltd’s stock reached a new 52-week high today, hitting Rs. 510.65 per share. Over the last month, the stock has experienced a significant increase of 20%, and it has also seen a rise of about 9% in the past week. This impressive performance reflects growing investor confidence and market optimism.

Conclusion: The Union budget 2024-25’s decision to keep tobacco tax rates unchanged has led to a positive market response for ITC Ltd., significantly boosting its share price. The unchanged tax rates are expected to support ITC’s continued revenue growth in its cigarette business.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.