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ITC Shares Recover as Tax Concerns Clash With Mixed Targets
ITC makes cigarettes and other consumer products.
Its shares have been under pressure after the government increased the GST on cigarettes.
The higher tax could make cigarettes less profitable for the company.
ITC also reported lower profit in its latest reported quarter.
Foreign investors have been reducing their ownership of ITC.
In the current trading session, the shares were almost unchanged at Rs 266.45.
The article gives two different RSI readings, both suggesting the stock was not clearly overbought or oversold.
Some brokerages are cautious, while others expect the share price to rise significantly.
Their price targets range from Rs 290 to Rs 440.
ITC shares faced pressure after cigarette GST rose from 28% to 40% of retail price on February 1, 2026.
Consolidated net profit fell 16.21% year over year to Rs 4,394.13 crore in Q1 FY27.
Foreign institutional investors’ stake reportedly declined from 40.5% in June 2024 to 34.2% in the June 2026 quarter.
ITC traded nearly flat at Rs 266.45, with a market capitalization of Rs 3.33 lakh crore and RSI readings reported at 48.2 and 37.7.
Brokerage targets range from Rs 290 at Systematix to Rs 440 at 360 One, reflecting sharply different views on the stock.
- Who
- ITC, the Government of India, foreign institutional investors, and brokerages covering ITC.
- What
- ITC shares remained under pressure despite a recent recovery, as investors assessed higher cigarette taxes, weaker earnings, foreign selling, and varied price targets.
- Where
- The developments concern ITC shares traded in the Indian market.
- When
- The cigarette tax change took effect on February 1, 2026; the article also cites Q1 FY27 results and a current trading session.
- Why
- Higher cigarette taxation, weaker profit and margins, continued foreign-investor selling, and subdued cigarette demand affected sentiment, while brokerages disagreed about the stock’s prospects.
Cautious outlook
Bullish outlook
Near-term share performance
Cautious outlook
Systematix expects ITC could remain range-bound and rates it HOLD because cigarette demand is subdued and price lags are hurting profitability. Macquarie downgraded the stock to NEUTRAL from OUTPERFORM.
Bullish outlook
360 One retained a Rs 440 target, implying about 66.3% potential upside from the recent price, using a sum-of-the-parts valuation.
Valuation target
Cautious outlook
Systematix kept its target at Rs 290, while Investec and JPMorgan gave targets of Rs 308 and Rs 310, respectively.
Bullish outlook
Antique Stock Broking set a Rs 408 target, and 360 One maintained the highest cited target at Rs 440.
Business conditions
Cautious outlook
The cautious view highlights higher cigarette taxes, subdued cigarette volumes, weaker earnings, lower margins and continued foreign-investor selling.
Bullish outlook
The more optimistic view is reflected in brokerages retaining substantially higher targets despite the recent share-price decline.
Key facts
- Current share price
- Rs 266.45, trading nearly flat in the current session
- Market capitalization
- Rs 3.33 lakh crore
- Q1 FY27 consolidated net profit
- Rs 4,394.13 crore, down 16.21% year over year
- Cigarette GST
- Raised from 28% to 40% of the retail price from February 1, 2026
- Foreign institutional investor stake
- Reportedly declined from 40.5% in June 2024 to 34.2% in the June 2026 quarter
- Performance cited
- Down 27.17% in 2026 and 46% over two years
- Reported price-target range
- Rs 290 from Systematix to Rs 440 from 360 One
Sources
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