The stock market witnessed a lot of volatility on Thursday, the first trading day of 2026. Meanwhile, shares of cigarette and tobacco manufacturing companies fell by more than 19 percent, causing panic among investors.
The falling stocks included those of Godfrey Phillips India Ltd and ITC. These shares fell sharply due to the government decision. Shares of Godfrey Phillips India Ltd fell 19.24 per cent to a low of ₹2,230.15 during intraday trading. Similarly, shares of ITC Ltd fell 9 per cent to ₹366.65.
Will cigarettes become more expensive?
This decline comes after the recent notification issued by the Central Government regarding the Central Excise (Amendment) Bill, 2025. Under this rule, additional excise duty will be imposed on products like cigarettes and tobacco from February 1, 2026. According to Wednesday’s statement, this excise duty will be imposed in addition to the existing 40 percent GST, making the tax even harsher for the industry. Currently, cigarettes in India are taxed at up to 53 percent of the retail price, which includes 28 percent GST and pricing based on size. This rate is still lower than the overall tax rate of 75 percent recommended by the World Health Organization (WHO), which aims to reduce consumption.
Shares of Godfrey Phillips India Limited
Technically, the stock was trading below its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day Simple Moving Averages (SMA). Its 14-day Relative Strength Index (RSI) stood at 26.05. Levels below 30 are considered oversold, while levels above 70 are considered overbought. The stock has fallen 23 percent in six months and 32 percent in three months. Experts say that this stock may soon fall to the level of ₹ 2,200.
ITC shares
ITC shares fell to their lowest level since February 2023. Its market capitalization has declined by about ₹45,000 crore. ITC shares fell 10 per cent to ₹362.70 per share, the lowest since the closing price of ₹361.45 on February 1, 2023. The market capitalization of the company declined by ₹45,104 crore to ₹4,59,812 crore.