ITC slips 1.15% as cigarette tax overhang clouds FMCG beat; analysts split on FY27 outlook

ITC stock fell to ₹304.50 after GST on cigarettes jumped from 28% to 40% of retail price. FMCG arm impressed with 15% revenue growth and 200bps EBIT margin expansion to 8.3%, while cigarette EBIT beat consensus by 15%. But brokerages model FY27 cigarette volumes down 8% and EBIT down 17%, with target prices spanning ₹290-394.

— Source publishedFri, 22 May, 2026, 12:00 IST·First seen Fri, 22 May, 2026, 12:10 IST·Source The Hindu BusinessLine

What happened

ITC stock slid 1.15% as analysts flagged cigarette tax overhang post GST hike to 40% of retail price. FMCG beat with 15% revenue growth and 200bps margin

Key facts

  • ₹304.50
  • -1.15%
  • -28% YoY
  • GST 28% to 40%
  • FMCG revenue +15%
  • FMCG EBIT margin +200bps to 8.3%
  • agri -15%
  • cigarette EBIT +15% vs consensus
  • FY27 cigarette volume -8%
  • FY27 cigarette EBIT -17%
  • targets ₹290-394

Why this matters

A depressed tobacco multiple alongside a scaling FMCG arm creates a window to pursue bolt-on FMCG acquisitions that accelerate the mix shift narrative and de-risk the regulatory overhang.