Earlier this week, a CNBC Awaaz report had stated that cigarette manufacturers have implemented sharp price hikes to offset higher excise duties, leading to higher EBIT per stick. As per the report, Godfrey Phillips India had raised the price of Marlboro Compact to ₹11.5 per stick from the previous ₹9.5.
Shares of Godfrey Phillips declined 4.9% to hit an intraday low of ₹2,400 per share on Friday. The stock was down 4.1% at ₹2,419.1 apiece around 10.25 am. It has gained 13.4% in the past month, has declined 34.7% in the last six months but has gained 21.2% in the past year.
HSBC on ITC: Downside limited but lack of upside triggersOn another note, brokerage firm HSBC on Friday had a ‘hold’ rating on ITC with a target price of ₹360 per share.
It said market checks suggested ITC had hiked prices by 20-30% to offset higher taxes, but only on part of its portfolio for now.
It said sensitivity on cigarette EBIT/cigarette price-to-earnings ratio (-25% EBIT growth, 10x price-to earnings-ratio) pointed to a 5% downside in a bear case.
While the downside is limited, there is a lack of upside triggers, HSBC added.
ITC shares were up flat at ₹326.3 around 10.25 am.
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