Shares of Godfrey Phillips India Ltd. fell more than 2% in Monday’s trade, slipping to ₹10,843 on the NSE, compared to the previous close of ₹11,073. The tobacco major emerged as one of the top losers in the morning session, as investor sentiment turned cautious following reports of a possible new levy on tobacco products.
According to reports, the government is considering an additional levy on tobacco-related items as the GST compensation cess is phased out. Options on the table include raising central excise duty on different categories of tobacco or introducing a health levy, which would require an amendment in Parliament.
While the government has indicated that the overall tax incidence on tobacco items would remain unchanged, the market fears that a new levy in Q4 FY25 could impact margins for cigarette makers, including Godfrey Phillips, ITC, and VST Industries.
The NDTV Profit report highlighted that the proposed levy will apply only to tobacco products, while other items under the 40% special rate—such as luxury cars, bikes, and carbonated drinks—are expected to be kept out.
At the current market price, Godfrey Phillips commands a market capitalization of ₹562.81 billion, with a P/E ratio of 43.19 and a dividend yield of 0.88%. The stock has been trading in the range of ₹10,803 – ₹11,073 today, close to its 52-week high of ₹11,465.
The decline comes as part of a broader reaction across the tobacco sector, with investors bracing for policy changes that may alter the pricing and taxation structure of cigarette products in the coming months.