Tobacco Stocks Plummet Amid New Excise Duties and Health Cess

Tobacco stocks, including Godfrey Phillips and ITC, experienced significant declines as the government announced new excise duties and a health cess starting February 1. These levies aim to increase the tax burden on tobacco products and pan masala, affecting pricing and market performance for tobacco manufacturers.

Tobacco stocks tumbled on Thursday in response to the government's announcement of new excise duties and a health cess effective February 1. Godfrey Phillips India saw a significant 17% drop, closing at Rs 2,289.65 on the BSE, reflecting the market's reaction to these financial changes.

ITC's shares fell 9.69%, reaching a 52-week low, as investors reacted to the upcoming excise burdens on tobacco products. The new levy regime also affected VST Industries, which saw a slight decline in its share price.

The Finance Ministry's late December announcement set the stage for increased taxes on various tobacco products, including a new MRP-based valuation mechanism. The move aims to curb tobacco consumption while impacting the financial landscape of tobacco product manufacturers.

(With inputs from agencies.)