Meanwhile, the S&P BSE Sensex was down 209.25 points or 0.65% at 31,865.53.
High volumes were witnessed on the counter. On the BSE, 42.12 lakh shares were traded on the counter so far as against the average daily volumes of 10.84 lakh shares in the past one quarter. The stock had hit a high of Rs 293.20 and a low of Rs 276.90 so far during the day.
The stock had dropped 3.4% to Rs 325.75 yesterday, 17 July 2017, ahead of the meeting of GST council to consider cess on cigarettes.
The stock had outperformed the market over the past one month till 17 July 2017, gaining 6.35% compared with the Sensex's 3.28% rise. The stock had also outperformed the market over the past one quarter, gaining 16.76% as against the Sensex's 9.05% rise.
The scrip had also outperformed the market over the past one year, advancing 30.88% as against the Sensex's 15.23% rise.
The large-cap company has equity capital of Rs 1216.18 crore. Face value per share is Rs 1.
The Goods & Services Tax (GST) Council in its meet yesterday, 17 July 2017, reviewed the compensation cess rates on cigarettes and recommended the increase in the same with effect from 18 July 2017.
The method of calibrating the compensation cess by the fitment committee did not take into consideration the cascading of taxes. As a result, the total tax incidence on cigarettes in GST regime has come down, as compared to the total tax in pre-GST regime. While any reduction in tax incidence on items of mass consumption would be welcome, the same would be unacceptable in case of demerit goods like cigarettes, press release said. Compensation cess rate on cigarettes will make the total tax incidence on cigarettes in GST regime at par with the total tax incidence in pre-GST regime.
For non filter cigarettes hike in cess ranged from Rs 485 to Rs 792 per thousand cigarettes while for filter cigarettes increase was in the range of Rs 485 to Rs 792 per thousand cigarettes.
The hike is seen as negative for ITC and some brokerages have even downgraded the stock and cut its target price.
ITC's net profit rose 12.1% to Rs 2669.47 crore on 14% growth in net sales to Rs 11125.54 crore in Q4 March 2017 over Q4 March 2016.
ITC is a diversified company, with presence in cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, packaged foods & confectionery, information technology, branded apparel, personal care, stationery and other FMCG products. ITC is a market leader in cigarettes.
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