Shares of ITC Ltd, one of India’s biggest conglomerates and the country’s leading cigarette manufacturer, are back in the spotlight this week. The company’s performance in the stock market is being closely watched after the GST Council’s latest decisions on tobacco taxation and shifting investor sentiment.
The company’s market capitalisation crossed ₹5.09 lakh crore, reflecting its strong presence in India’s corporate landscape. Despite its size, the stock has been mostly range-bound in recent months and has delivered little to no returns in the past two years. Investors remain cautious due to concerns about changes in GST rules, British American Tobacco’s partial stake sale, and growing competition from global brands such as Marlboro.
GST 2.0 Roadmap: Relief and Uncertainty Ahead
The 56th GST Council meeting brought some clarity but also new questions for ITC and its investors. The Council decided to maintain the existing 28% GST plus compensation cess on cigarettes until all pending borrowings linked to compensation are repaid. After that, a new 40% GST slab based on retail selling price (RSP) will be introduced.
Brokerage firm Jefferies highlighted that this change could reduce the overall tax burden on cigarettes by nearly 5 percentage points. This may give ITC room to lower prices in value-tier products, helping the company compete better against illicit trade. However, analysts warn that two key issues remain uncertain: the exact timeline for implementation and the future of the National Calamity Contingent Duty (NCCD), which adds to cigarette costs.
While some market participants see the decision as a medium-term positive, the lack of complete clarity means that short-term volatility is likely to continue for ITC shares.
ITC Share Price Performance and Technical Trends
ITC’s stock is currently hovering close to its 52-week low of ₹390.15, showing weakness despite the company’s strong business fundamentals. Technical charts indicate that the stock faces resistance around ₹410–₹415, while immediate support levels are seen at ₹403 and ₹398.
For September 2025, short-term price targets suggest a possible range between ₹401 and ₹454, with analysts projecting an average price of ₹406 by the end of the month.
Market expert Gaurang Shah has maintained a Buy recommendation with a target of ₹440, pointing to the long-term advantages that ITC could gain from the new GST framework and India’s growing consumption-driven economy. Looking further ahead, broader forecasts for 2025 suggest a trading range between ₹523 and ₹549, with some models estimating that the stock could even reach ₹550.22 by the year-end.
This mixed outlook highlights how short-term uncertainties may continue to weigh on ITC, while its long-term growth story remains intact.
Strong Fundamentals Support Stability
Despite market concerns, ITC’s financial health remains solid. For FY25, the company posted a net profit of ₹34,746.63 crore, supported by a strong Return on Equity (ROE) of 28.17%. The company carries negligible debt, which gives it financial flexibility in challenging times.
ITC’s diversified portfolio across FMCG, hotels, paperboards, agribusiness, and IT services provides a stable earnings base. However, cigarettes continue to contribute the largest share of profits, making taxation and regulation key factors in the company’s performance.
Analysts believe ITC’s pricing power, brand strength, and wide distribution network give it an edge over rivals. Its non-cigarette businesses, particularly FMCG and hotels, are also showing signs of growth, offering additional support for long-term expansion.
Outlook for Investors
Going forward, ITC’s stock is expected to experience volatility in the near term as markets absorb the implications of the GST changes and monitor competition from global players. However, the company’s robust balance sheet, diversified revenue base, and strong market position make it a resilient long-term bet.
Investors should keep an eye on government updates regarding the 40% RSP-based GST framework and any potential changes in non-GST levies like NCCD. Clearer guidelines on these issues will play a decisive role in shaping ITC’s share performance in the coming quarters.
In summary, ITC may face some turbulence in the immediate future, but its solid fundamentals and long-term growth potential suggest that patient investors could be rewarded.
F.A.Q.
– Why is ITC’s share price in the news right now?
ITC shares are in focus because the GST Council announced key decisions on tobacco taxation, which could impact the company’s biggest business segment – cigarettes.
– What is the current share price of ITC?
As of Wednesday at 09:48 AM IST, ITC was trading at ₹408.75, slightly up from the previous close.
– How will the GST 2.0 roadmap affect ITC?
The GST Council plans to move from the current 28% GST + cess system to a 40% GST slab based on retail selling price (RSP) in the future. This could reduce the overall tax burden on cigarettes by about 5%, giving ITC room to adjust prices and fight illicit trade.
– What are analysts’ target prices for ITC?
Short-term targets range between ₹401 and ₹454 for September 2025. Long-term projections for 2025 suggest a range of ₹523–₹549, with some forecasts going up to ₹550.22.
– Is ITC a good stock to buy now?
Analysts remain positive on ITC’s long-term outlook due to its strong fundamentals, high ROE, negligible debt, and diversified portfolio. However, short-term volatility is expected until the GST timeline and NCCD clarity emerge.
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