Shares of cigarette makers rallied up to 16 per cent on February 18 amid reports of price hikes.
Shares of the Marlboro maker in the country, Godfrey Phillips India, led the gains, jumping as much as 16 per cent to an intraday high of Rs 2,393.90 apiece. VST Industries, which produces brands like Total and Charms, rose over 3 per cent to Rs 247.50 per share, while the gold flake maker ITC advanced nearly as much as 2 per cent to touch Rs 331.95 during the session.
The rally comes after multiple media reports indicated that cigarette manufacturers have raised prices of cigarettes to partially offset the impact of excise duty announced earlier this year.
The sector had been under significant pressure last month, with shares of cigarette companies falling between 10 per cent and 25 per cent after the government increased excise duty at the start of 2026. Investors were concerned that higher taxes would either compress margins, if companies absorbed the costs, or hurt volumes if retail prices were raised too aggressively.
Details Of The Excise Hike
The revised duty structure, which took effect on February 1, significantly increased taxes on cigarettes across categories. In real terms, this led to price increases of up to 60 per cent. The tax now ranges from Rs 2,050 to Rs 8,500 per 1,000 sticks, depending on the length of the cigarette. Longer sticks will face higher tax incidence. This duty is charged over and above the existing 40 per cent goods and services tax (GST) applicable to tobacco products.
Short, non-filter cigarettes, up to 65 mm, attract duty of about Rs 2,050 per 1,000 sticks, which translates to roughly Rs 2.05 per stick.
For mid-length cigarettes in the 65–70 mm segment, the excise duty is Rs 3,600 per 1,000 sticks for non-filter types and Rs 4,000 per 1,000 sticks for filter variants, which roughly translates to Rs 3.6–4 per stick.
Standard filtered cigarettes in the 70–75 mm category are taxed at around Rs 5,400 per 1,000 sticks, which is about Rs 5.4 per stick.
Premium variants fall under the highest slab, for which duties go up to Rs 8,500 per 1,000 sticks. This is about Rs 8.5 per stick.
