ITC Shares Rise 1.5% as Company Hikes Gold Flake Cigarette Prices to Rs 135 Per Pack
Shares of Kolkata-headquartered conglomerate ITC Ltd moved up to 1.5% higher on Dalal Street following channel checks and distributor reports indicating a fresh round of retail price hikes across its core tobacco portfolio, led by its flagship Gold Flake brand.
According to channel checks and dealer data, ITC has increased the maximum retail price (MRP) of a 10-stick pack of Gold Flake Premium regular-size filter-tipped (RSFT) cigarettes (60–70 mm) to ₹135 from ₹125 earlier, reflecting an 8% increase (₹10 per pack).
Second Price Hike for Gold Flake in 2026
The latest upward revision marks the second price hike for Gold Flake Premium this year. Earlier in June, ITC raised the pack's retail price from ₹115 to ₹125, an 8.7% rise. With the new price of ₹135 taking effect, the cumulative increase in 2026 stands at 17.4%.
The price adjustments are part of a broader, calibrated strategy implemented across ITC's cigarette portfolio over recent months:
Key Cigarette Portfolio Revisions:
- Gold Flake Premium (10-stick RSFT): Increased from ₹125 to ₹135, up from ₹115 at the start of the year.
- Gold Flake Super Star (10-stick pack): Increased from ₹79 to ₹89, registering a 12.7% rise.
- Classic Connect (20-stick pack): Increased from ₹390 to ₹428, an increase of roughly 9.7%.
Managing the Tax Burden
The phased price hikes follow regulatory adjustments enacted on February 1, when cigarettes transitioned into a 40% Goods and Services Tax (GST) slab alongside revised excise duties categorized by cigarette length and filter specifications.
To protect operating margins against increased tax outlays, cigarette manufacturers have been passing these higher duties on to consumers. Analysts note that rather than taking a singular, sharp price hike that could disrupt trade channels, ITC chose a staggered approach across select stock-keeping units (SKUs) to preserve brand equity and test consumer price elasticity.
Margin Protection Versus Volume Headwinds
The cigarette division generates the overwhelming majority of ITC's operating profits, serving as a primary driver of the group's cash flow generation, dividend payouts, and capital expenditure across its non-tobacco FMCG, paperboards, and agribusiness divisions.
Market participants are weighing two opposing dynamics:
Factors Driving Investor Attention:
- Pricing Power and Realisation: The ability to lift end-consumer prices without regulatory pushback reinforces ITC’s pricing power and supports segment EBITDA margins against rising indirect tax expenses.
- Volume Elasticity and Illicit Trade: Higher retail prices widen the cost gap between legal, duty-paid cigarettes and untaxed, counterfeit alternatives. Continued retail price escalation poses a risk of trading down or subdued volume growth in coming quarters.
Brokerage notes and channel monitors indicate that shipments of the new ₹135 MRP packs are being dispatched across distribution nodes and retail networks. While the price hike helps protect profitability per stick, Street participants will scrutinize upcoming quarterly volume prints to determine whether legal volume absorption remains stable under the higher price regime.
