The stock slipped 15% to Rs 277 on BSE, its sharpest intra-day fall since October 27, 2008
LATEST NEWS : ITC has slipped 15% to Rs 277, its sharpest intra-day fall in past one decade on BSE, after the Goods and Services Tax (GST) Council increases cess on cigarettes. The stock has fallen nearly 18% in past two trading sessions. Earlier, on October 27, 2008, the stock tanked 17% in intra-day trade.
“The GST Council meeting on Monday raised the cess on cigarettes, in a bid to reduce profiteering by companies and harm to public health. The exact amount of the cess would depend on the length of the cigarettes,” the Business Standard report suggests.
Cess on cigarettes of up to 65 mm was raised by Rs 485 per 1,000 sticks in the case of both filter and non-filter ones. Those longer than 65 mm had different cess rates — it increased by Rs 792 per 1,000 sticks for non-filter ones; for filtered ones, between 65 mm and 70 mm, the cess was raised by Rs 621 per 1,000 sticks and for those between 70 mm and 75 mm, it was increased by Rs 792 per 1,000 sticks, added report. CLICK HERE TO READ FULL REPORT.
“As a result, retail price per stick increases by 4.5-9.8% depending on the segment, assuming net sales per stick as constant. We believe that ITC will take 11% price hike and volume will decline 2% resulting in a 5% Ebit growth in cigarettes division in FY18,” analysts at IIFL Institutional Equities said in a report.