Budget: No news turns out to be good news for ITC, Godfrey Phillips

NEW DELHI: Shares of ITC gained over 3 per cent after Finance Minister Nirmala Sitharaman refrained from increasing taxes on cigarettes. Its peers Godfrey Phillips also added over 3 per cent while VST Industries was flat. A section of the industry was expecting a marginal hike in excise duty in the Budget.

"We do not expect any positives for the organised cigarette industry in this Budget. We expect a marginal hike in excise duty on tobacco," Nirmal Bang Institutional Equities had said in its Budget preview.

Axis Securities expected raising of either excise duty or NCCD (national calamity contingent duty) on cigarettes and tobacco products, which would have been negative for companies such as ITC, VST Industries and Godfrey Phillips.


Edelweiss also expected a tax hike on cigarettes as "there haven't been any hikes for the past two years."

Meanwhile, in its pre-Budget memorandum, the PHD Chamber of Commerce & Industry (PHDCCI) sought for a reduction in tax on cigarettes, arguing that it would help the legal industry to recoup volume from the illicit trade and provide higher revenue to the government.