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Diversified conglomerate ITC saw its shares continue to crash on Dalal Street in 2026, hitting multi-year lows as investors appeared to be worried that elevated commodity prices and input costs could hit the company's margins in the near term, with analysts expecting more price hikes to protect margins and the top line. The Government of India earlier this year imposed a higher excise duty on cigarettes, while ITC has raised prices across several cigarette brands. Although this is expected to improve realizations, the Street remains worried that higher prices could result in a sharper decline in cigarette volumes. Following the excise duty setback, surging key input prices, such as sugar, copra and palm oil, have sent the stock into a tailspin. In August, the stock hit a three-year low before seeing some modest recovery in September. The shares began the year with a massive drop of 20% in January, and the weakness persisted in the subsequent months, resulting in a 34% drop so far. The fall not only created significant wealth erosion for shareholders but also wiped out ₹1.72 lakh crore in the company's market capitalization, which fell to ₹3.32 lakh crore at Tuesday's close. To be precise, the stock came under pressure after touching a record high of ₹499 in September 2024 and has so far lost 47% from that peak. For a blue-chip stock, this kind of fall is a rare occurrence, but it highlights the deepening concerns. In its recent report, domestic brokerage firm 360 ONE Capital Research has maintained its 'buy' rating on ITC with an unchanged target price of ₹440 per share. The brokerage believes the recent weakness has created an opportunity as the impact of cigarette price increases starts flowing through profitability. At the same time, the brokerage expects support from FMCG, paperboards and packaging, agri and ITC's technology businesses. The brokerage highlighted that the stock has been range-bound over the last two months, driven by uncertainties related to the impact of recent tax hikes on overall cigarette volumes. However, it said that in the current industry dynamics, the pricing lever has more weight than the volume lever, which should offset the decline in volumes that is expected to follow, as the company has been consistently raising prices across well-known brands in a staggered and phased manner. Meanwhile, Japanese brokerage firm Nomura has also maintained its 'BUY' rating on the stock. "Most raw material prices, except for Brent and HDPE, have either remained range-bound or softened m-m in September. However, they are still up q-q/y-y at levels materially above the product price hikes taken by consumer companies in 1QFY27," Nomura said in its September 28 report. Sugar prices corrected sharply, falling 8% month-on-month and 21% from their peak, but remain up 18% year-on-year, potentially pressuring margins for Britannia, Nestle, Dabur, ITC and HUL. Meanwhile, HDFC Securities has maintained an 'ADD' call on the Nifty 50 stock and suggested a share price target of ₹300. Disclaimer: We advise investors to check with certified experts before making any investment decisions. Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends. Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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