Cigarette stocks slump up to 7 pc after Budget hikes excise duty on tobacco products

Cigarette stocks on Saturday plunged up to 7 per cent, led by ITC, as tobacco related products are set to become more expensive due to hike in excise duty proposed in the Union Budget for 2020-21.

ITC tanked 6.97 per cent to close at Rs 218.85 on the BSE. During the trade, it plummeted 8.31 per cent to Rs 215.70 -- its 52-week low. It was the worst performer in the Sensex pack.

Shares of Godfrey Phillips India dropped 6.82 per cent, VST Industries 5.40 per cent and Golden Tobacco 0.18 per cent.

A large number of items including cigarettes, chewing tobacco are set to become more expensive due to hike in taxes proposed in the Union Budget for 2020-21.

"As a revenue measure, I propose to raise excise duty, by way of National Calamity Contingent Duty on cigarettes and other tobacco products. However, no change is being made in the duty rates of bidis," Finance Minister Nirmala Sitharaman said.