Tobacco stocks rebound after sharp plunge

ITC Ltd sells 80 percent of the cigarettes in the world's second most populous country where 275 million people use tobacco products.

Tobacco stocks today bounced back rising by up to 3 % on value buying, a day after a sharp plunge in the wake of higher cess.

The stock of ITC made a positive opening and gained 2.56 % to Rs 291.90 on the BSE.

On the volume front, 14.98 lakh shares of the company were traded on the BSE and over two crore shares changed hands on the NSE during the morning trade.

Shares of Godfrey Phillips India went up by 2.62 % to Rs 1,188 and those of VST Industries rose by 1.60 % to Rs 3,334.45.

Tobacco stocks yesterday took a severe beating, led by ITC that plummeted 15 % in intra-day session, after the GST Council raised the cess on cigarettes. ITC later ended the day 12.63 % lower at Rs 284.60.

Cigarette stocks were down in Monday’s trading session also.

The GST Council on Monday raised the cess on cigarettes to take away an estimated Rs 5,000 crore annual “windfall” manufacturers could have reaped from lower GST rates.