After two years of decline, cigarette sales likely to rebound this year

KOLKATA: Cigarette sales are set to rebound this year after more than two years of declining sales due to the lowest hike in excise duties in six years.

While the cigarette makers will pass on the tax hike to consumers, the industry expects the market will grow sales by 5-6 per cent this year bringing relief to revenue which was battered due to recurrent measures by the government to clamp down on smoking.

Reports by multiple brokerage and research firms are all upbeat about this year’s Budget having all the right ingredients favouring the cigarette makers.


Investment banking firm Jefferies said while punitive excise duty regime on cigarettes has forced market leader ITC to take a sharp price increase and hurt sales volumes , FY18 looks like a benign year for cigarette volumes. It has pegged the sales volume growth at 6 per cent .

JM Financial too has pegged volume growth of 5-6 per cent , while Edelweiss has revised its estimates to 5 per cent as against 3 per cent earlier.