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2 min read | Updated on July 24, 2024, 14:42 IST
SUMMARY
ITC shares rallied as much as 3.74% to hit a 52-week high of ₹510.65 apiece on the NSE. More than 3 crore shares of the FMCG giant changed hands on the exchange. The company's market capitalisation surged to ₹6.20 lakh crore.
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ITC shares extend gains for second straight day to hit year high after no tax on cigarettes in Budget 2024
ITC shares rallied as much as 3.74% to hit a 52-week high of ₹510.65 apiece on the NSE. More than 3 crore shares of the FMCG giant changed hands on the exchange. The market capitalisation of the company surged to ₹6.20 lakh crore.
The rally in stock price was seen after a 5% spike in ITC shares on Tuesday after the Budget proposals. In two days, ITC shares have risen around 9%.
Finance Minister Nirmala Sitharaman's Budget for 2024-25 announced no new tax on tobacco products, which led to no change in cigarette prices.
The Union government levies National Calamity Contingent Duty (NCCD) on cigarettes in addition to 28% GST on tobacco products. The NCCD can be adjusted during the annual budget.
NCCD is leviable on specified tobacco products such as beedis, cigarettes, chewing tobacco and gutkha, at varying ad valorem rate ranging from 25% to 60% or specific rate ranging from ₹1 per thousand to ₹850 per thousand.
Besides, Basic Excise Duty is also levied on specified tobacco products at varying ad valorem rate ranging from 0.5% to 1%.
According to experts, Budget proposals, income tax relief and duty cuts are expected to boost demand for FMCG and consumer durables products.
ITC Ltd is the country’s largest cigarette manufacturer, and the segment contributes significantly to the country's overall revenue.
The cigarettes business contributed ₹8,688.92 crore to the overall revenue of ₹19,291.40 crore in the March quarter of 2023-24.
In the March quarter, the profit before taxes from the cigarettes business was ₹5,157.57 crore, and the total PBIT was ₹6,560.51 crore.
Shares of ITC Ltd were trading 0.42% higher at ₹494 apiece on the NSE at 2:02 pm.
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