Stocks of cigarette cos slump on hike in taxes

Shares of most cigarette companies ended in the negative territory on Wednesday after Finance Minister Nirmala Sitharaman announced a hike in taxes on cigarettes in the Union Budget.The stock of Godfrey Phillips plunged as much as 5.31 percent to settle at Rs 1,821.15 on the BSE.

Shares of most cigarette companies ended in the negative territory on Wednesday after Finance Minister Nirmala Sitharaman announced a hike in taxes on cigarettes in the Union Budget.

The stock of Godfrey Phillips plunged as much as 5.31 percent to settle at Rs 1,821.15 on the BSE. NTC Industries declined 4.65 per cent to close at Rs 85.15.

In addition, VST Industries slipped 2.02 per cent to Rs 2,961.4 and Golden Tobacco declined 1.54 per cent to Rs 60.8.

Shares of diversified ITC, which is also the country's leading cigarette player, witnessed wild swings, before finally settling with a gain of 2.61 per cent at Rs 361.45. In intra-day trade, the stock hit its 52-week high of Rs 365.65 and a low of Rs 329.

''ITC and other tobacco stocks were negative as Government of India (GoI) has increased the calamity related tax by 16 percent. However, before the Budget the markets were expecting a higher raise so the expectations were already built in for such a move,'' said Narendra Solanki, Head - Equity Research, Anand Rathi Shares & Stock Brokers.

In her Budget speech, the finance minister announced a hike in taxes on cigarettes as she revised upwards the National Calamity Contingent Duty (NCCD) on specified cigarettes by about 16 per cent. It was last revised three years ago.

Meanwhile, equity benchmarks Sensex and Nifty ended on a mixed note. The 30-share BSE benchmark Sensex climbed 158.18 points or 0.27 per cent to settle at 59,708.08. In contrast, the broader NSE Nifty declined 45.85 points or 0.26 per cent to end at 17,616.30.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)