Shares of ITC Limited, a prominent cigarette and Fast-Moving Consumer Goods (FMCG) company, have consistently traded below the Rs 400 threshold for the past seven months. The stock dipped below this crucial level on January 2 and has not reclaimed it since. On August 4, 2026, ITC shares saw a modest rise of 0.47% to close at Rs 287.65, with the company's market capitalization standing at Rs 3.60 lakh crore.
Factors Behind ITC's Share Decline
The prolonged downtrend for ITC shares this year has been largely attributed to a significant increase in the Goods and Services Tax (GST) on cigarettes. The tax rate on cigarettes in India was hiked to 40% from the previous 28% GST plus compensation cess, impacting investor sentiment. Additionally, the government's notification on January 1 about levying extra excise duty on tobacco products and a new cess on pan masala from February 1 further pressured the stock.
The stock also fell below the Rs 300 mark on May 26, following negative sentiment stemming from the cigarette tax hike and weaker-than-expected Q4 earnings. It subsequently hit a 52-week low of Rs 275 on June 4, with geopolitical tensions, including the US-Iran war, adding to broader market anxieties.
Analyst Outlook and Price Targets
Market experts are closely monitoring ITC's performance, offering varied perspectives on its future trajectory. According to Hitesh Tailor, Technical Research Analyst at Choice Broking, the stock, currently around Rs 290, is holding above a critical support zone of Rs 270–275. He identifies the Rs 310–320 area as a significant resistance level. A sustained move above this resistance would be necessary to confirm a trend reversal, otherwise, the stock is expected to remain range-bound with a cautious bias.
Virat Jagad, Sr. Technical Research Analyst at Bonanza, notes a strong pullback from lower levels, marked by a bullish reversal candle and above-average volumes, indicating renewed buying interest. While the stock has reclaimed its 20-day exponential moving average (DEMA) and the Relative Strength Index (RSI) is above 60, suggesting improving momentum, it still trades below its 50, 100, and 200 DEMAs, indicating a weak broader trend. Jagad suggests that a sustained move above Rs 295–300 could trigger further upside towards Rs 305–310, with immediate support at Rs 285, followed by Rs 280. Traders might consider accumulating on dips with a strict stop loss below Rs 280, provided the stock maintains its short-term support.
Disclaimer: This article provides market insights for informational purposes only and should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.