Kolkata: The weighted average excise hike for ITC works out at 16 per cent from the Budget that hiked the duty on cigarettes by up to 25 per cent.
The government today hiked excise duty ranging from 15 per cent on cigarettes of length over 65 mm to 25 per cent for cigarettes of length less than 65 mm.
“The weighted average excise hike for ITC works out at 16 per cent (negative for ITC in our view given the expectations of a 8-10 per cent hike).
“Last year, the hike was at 22 per cent,” Religare Capital Markets Analyst Gaurang Kakkad said.
“We expect ITC to take 10-12 per cent price hike for the year which would be a clear negative for volumes/EBIT growth, given continued pressure on volume/EBIT growth currently (cigarette volumes for Q3 declined by 12-13 per cent and EBIT growth was subdued at 8.8 per cent),” the brokerage house