ITC shares have experienced a significant downturn in 2026, primarily driven by an unprecedented increase in cigarette taxes. The stock has fallen by 24% this year, plummeting to a new 52-week low of Rs 275 in recent trading sessions.
This sharp decline follows the government's decision to replace the old compensation cess structure, raising the core Goods and Services Tax (GST) on cigarettes from 28% to 40% of the retail price, effective February 1, 2026. This regulatory reset has put substantial pressure on the FMCG giant's stock performance.
Despite the prolonged selling pressure, ITC shares registered a minor recovery, gaining 0.75% to Rs 278.60 in late morning deals. Technical indicators suggest the stock has entered oversold territory, with its Relative Strength Index (RSI) falling to 27. An RSI below 30 typically indicates that a stock may be undervalued or experiencing excessive selling.
Analyst Insights on ITC's Outlook
Market experts are closely monitoring ITC's trajectory. Virat Jagad, Senior Technical Research Analyst at Bonanza, noted that ITC remains in a strong downtrend after breaking below the crucial Rs 310–320 support zone, which has now transitioned into a major resistance area. Jagad highlighted that the price action continues to form lower highs and lower lows, signaling persistent selling pressure. While a technical bounce cannot be ruled out due to the oversold RSI, he emphasized that a sustained move above Rs 320 is necessary to meaningfully improve the technical outlook. Immediate support for the stock is identified near Rs 270–275.
Echoing a similar sentiment, Hitesh Tailor, Technical Research Analyst at Choice Broking, stated that ITC has remained under selling pressure since breaching the Rs 300 support zone. Tailor's analysis suggests a continuation of the broader corrective trend, visible through lower highs and lower lows on the weekly chart. He warned that weakness might persist in the near term as long as ITC trades below the Rs 300–305 resistance zone, with potential further pressure towards the Rs 270–260 range on the downside.
Investors in ITC have faced considerable losses, with the stock declining 31% over the past six months and 33% over the last year. The company's market capitalization currently stands at Rs 3.48 lakh crore.