ITC, Godfrey Phillips Shares Surge After January Sell-Off as Cigarette Stocks Stage Strong Comeback

Shares of leading cigarette makers ITC Ltd and Godfrey Phillips India rose sharply on Thursday after a brutal start to 2026, as investors returned to tobacco stocks following last month’s heavy sell-off triggered by new cigarette taxes.The rebound comes after January saw one of the worst months for cigarette stocks in years. ITC, in particular, recorded its poorest January performance on record, with sharp losses driven by concerns over higher excise duties and their impact on demand and profitability.On 6 February, market sentiment shifted. Investors stepped back into beaten-down stocks, pushing ITC and Godfrey Phillips shares higher, as value buying and stronger quarterly results helped improve confidence.Excise Duty Shock: Why Cigarette Stocks Crashed in JanuaryThe sell-off began after the government implemented a new excise duty on cigarettes and tobacco products from 1 February 2026. Under the revised structure, cigarette manufacturers must pay additional duties ranging from ₹2,050 to ₹8,500 per 1,000 sticks, depending on product length, on top of the existing 40% GST.This led to fears of sharp price increases at the retail level, which could affect consumer demand and volumes. Since cigarettes contribute a large share of revenue and profits for companies like ITC, the market reacted quickly.In January,…  ​Read MoreStartupTalky- Business News, Insights and Stories