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ITC Shares Slump on Loose Cigarettes Ban
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ITC shares on Tuesday fell over 4.5 per cent to Rs 317.60, a day after Maharashtra banned the sale of loose cigarettes.
The ITC stock ended over 4 per cent down at Rs 318.65, underperforming the broader Nifty and the Sensex which were closed 0.48 per cent down.
In ITC's sales pie, Maharashtra contributes 9 per cent. The ban could lead to a 1 per cent volume decline for ITC, analysts said.
If the state government does manage to implement such a ban it will definitely hit branded cigarette volumes, Suruchi Jain of Morningstar India told NDTV
If other states take similar action then downgrades can be significant, they said.
Cigarette-maker Godfrey Philips' shares also fell over 3 per cent on Tuesday to Rs 509.95 on the news. It closed a little over 2 per cent down.
On May 28, Chandigarh became the first region to ban the sale of loose cigarettes.
The ITC stock ended over 4 per cent down at Rs 318.65, underperforming the broader Nifty and the Sensex which were closed 0.48 per cent down.
In ITC's sales pie, Maharashtra contributes 9 per cent. The ban could lead to a 1 per cent volume decline for ITC, analysts said.
If the state government does manage to implement such a ban it will definitely hit branded cigarette volumes, Suruchi Jain of Morningstar India told NDTV
If other states take similar action then downgrades can be significant, they said.
Cigarette-maker Godfrey Philips' shares also fell over 3 per cent on Tuesday to Rs 509.95 on the news. It closed a little over 2 per cent down.
On May 28, Chandigarh became the first region to ban the sale of loose cigarettes.