For years, ITC has occupied a unique place in Indian investors’ portfolios. Some buy it for stability, others own it for its steady dividend payouts. It has also earned the stock nickname of ‘Dividend King’. But after a sharp correction in the stock this year, many shareholders are worried. Does ITC still deserve a place in their long-term portfolio, or is it time to book profit?
ITC shares slide to fresh 52-week low
The share price of ITC also touched a fresh 52-week low of Rs 275.05 in intra-day trade on June 4. So far the shares have lost around 23% in 2026 and have fallen nearly 33% over the last one year. Just to put in context, the 52-week high for ITC is at Rs 428.55.
The decline has come after the government announced a significant increase in cigarette duties earlier this year, raising concerns about the growth potential for ITC’s most profitable business segment.
Therefore, what’s the analyst’s take on the ITC stock now?
We caught up with a host of market experts who shared there views on the ITC share price and the outlook going forward-
#Why the cigarette business remains the biggest concern
According to Sunny Agrawal, Head of Fundamental Research at SBI Securities, the recent correction is closely linked to worries around cigarette taxation.
“ITC’s stock has corrected sharply following the excise duty hike announced in January 2026, which has raised concerns around the outlook for its core cigarette business,” he said.
Speaking to financialexpress.com, he added, “Cigarettes account for 41% of revenue and a disproportionately higher share of profits, making the segment particularly sensitive to regulatory and taxation changes.”
Agrawal explained that higher taxes create a near-term challenge because cigarette prices usually rise after duty increases, which can impact consumer demand and encourage a shift towards illicit products.
“This creates uncertainty around earnings visibility in the cigarette segment which has historically been the company’s primary cash generator,” he added.
#Can FMCG growth reduce ITC’s dependence on cigarettes?
While concerns around cigarettes dominate the discussion, analysts point out that ITC is no longer just a tobacco company.
The company has steadily expanded its Fast-Moving Consumer Goods (FMCG) business across categories such as packaged foods, personal care and household products.
According to Agrawal, “ITC’s growth is increasingly being driven by its FMCG-Others segment, which delivered double-digit revenue growth in FY26 along with visible margin expansion.”
However, he also cautioned that the profitability profile of the FMCG business is still evolving compared to more established consumer goods companies.
“While the cigarette business continues to provide stability and strong cash flows, the regulatory overhang caps near-term upside,” he said.
#Is the dividend story still intact?
One reason many investors continue to hold ITC is its reputation as a consistent dividend payer.
Vincent K A, Senior Research Analyst at Geojit Investments, believes the company’s cash-generation ability remains a major strength despite current challenges.
“ITC remains a consistent dividend-paying company, underpinned by strong cash flow generation,” he said.
According to him, the recent weakness in the stock reflects temporary pressures rather than a structural problem.
“The recent correction in its share price reflects near-term margin pressures arising from a sharp increase in cigarette taxation and concerns over a weak monsoon which have weighed on its FMCG segments,” he explained.
He also noted that the company has historically managed similar situations through calibrated price increases.
“While the cigarette business continues to be the primary contributor to profitability, ITC has made notable progress in diversifying its earnings base through the steady expansion of its non-cigarette FMCG portfolio.”
His view remains constructive for patient investors.
“Long-term investors can accumulate on dips,” he said.
#ITC: Should investors ‘Hold’ or ‘Sell’?
Market veteran Ambareesh Baliga believes the current pressure may not be permanent.
“The hike in duties as far as cigarettes are concerned is happening after a long time. What is even more pertinent is that this time the hike has been much higher than what we have seen in the past. So the effect also will be for a longer time,” he said in an exclusive chat with financialexpress.com.
Baliga pointed out that cigarette volumes typically weaken immediately after tax hikes but recover later.
“For a while, volumes get affected, but then it normalises over a period of time. This time, since the hike was much higher, it may take a bit longer.”
He expects the impact to gradually fade. “I see that getting normalised possibly over the next one or two quarters.”
For long-term investors, “ITC remains a ‘buy-on-dips’ stock for those with patience for the longer term. Cigarettes will continue to be a cash-flow business, and that cash needs to get invested into future businesses.”
According to Baliga, the FMCG business could play a much larger role over the next few years, helping diversify ITC’s earnings profile beyond cigarettes.
#What are technical indicators signalling?
From a technical perspective, the picture remains weak, although some indicators suggest selling pressure may be easing.
According to Hitesh Tailor, Technical Research Analyst at Choice Broking, ITC the stock remains below key moving averages and continues to show a weak trend.
He noted, “As long as ITC remains below the Rs 300–310 zone, the broader bias is likely to remain cautious, with support seen near Rs 270–250 levels.”
Conclusion
Though market experts are concerned about the near-term margin pressure for the ITC share price, most pointed out that it is a long-term buy for those who have the patience. However, they do see the downside trend continuing over the near future.
Disclaimer: The views and investment tips expressed by market experts in this article are their own and do not reflect the views of this publication. Investors are advised to check with SEBI-registered financial advisors before making any investment decisions, as market conditions can change rapidly. This article does not constitute an offer or solicitation to buy or sell any security. This disclaimer has been generated using AI to support user well-being and responsible content consumption.