ITC slides to three-year low as tobacco excise hike prompts brokerage downgrades
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Mumbai: Shares of cigarette-to-consumer goods conglomerate ITC closed at a three-year low on Friday, extending losses to the second straight session after most brokerages downgraded it following the government's announcement of an additional excise duty on tobacco products effective February 1. The stock fell 3.8% to ₹350.1 on Friday, after plunging close to 10% on Thursday. Most brokerages downgraded the stock from bullish calls to cautious or bearish ratings after the excise duty hike, as the move is seen as increasing cigarette prices, which is feared to dampen demand. Nuvama, which downgraded ITC from 'buy' to 'hold', said, "While we expected a sharp tax hike on cigarettes, the magnitude seems higher than anticipated, likely prompting consensus downgrades to ITC's cigarette volume and EBITDA (earnings before interest, tax, depreciation, and amortisation) estimates as well as multiples." The stock...