Godfrey Phillips Shares: Shares of Godfrey Phillips India Ltd., a manufacturer of cigarettes and tobacco products, jumped more than 6% today, giving it a 31% gain in three days.

Shares of Godfrey Phillips India Limited gave a return of 31% in 3 days

Godfrey Phillips Shares: Shares of cigarette maker Godfrey Phillips India Ltd. rose more than 6% during trading on Thursday. This brought its three-day gain to 31%. At 10:28 am, Godfrey Phillips India shares were trading at ₹2524.10, up 1.79% on the BSE.

Earlier, it had gained 6.26% to reach a high of 2635.15. There's a specific reason for this surge in shares. Shares are experiencing a significant surge following news that cigarette prices will increase from February 1, 2026, due to the imposition of additional excise duty on tobacco products like cigarettes, bidis, and pan masala.

Cigarette companies show pricing power. 

Vinod Nair, research head at Geojit Investments, said that now with the pricing adjustments in place, the short-term margin pressure for cigarette makers is looking more manageable.

He said, "The December quarter results suggest that the earlier weakness was mostly tax-driven, rather than due to any structural slowdown in demand. While higher retail prices do impact volumes for a short time, cigarette companies have historically demonstrated strong pricing power. This has allowed them to preserve profitability even under a high tax regime. Therefore, the recent valuation correction could present a significant opportunity for investors, especially those companies that can maintain margins and earnings through calibrated price action."

Why did the price of cigarettes increase? 

The government announced a significant increase in cigarette taxes, effective February 1, 2026. The revised structure increases GST on sin goods such as pan masala, gutkha, cigarettes, bidis, raw and scented tobacco from 28% to 40%. Excise duty was also increased, resulting in an increase of approximately ₹2 to ₹11 per cigarette.