ITC stock in 2026: Tax shock, targets, chart levels

Why ITC is trending again in 2026

ITC has become a talking point on social media because the stock has struggled for an extended period, even as many investors still view it as a defensive, dividend-led holding. Posts highlight that the shares are described as being in a bear grip for up to three years. The stock is stated to be down 18% over two years and 12% over three years. The sharper focus in 2026 is because the fall accelerated after tax-related announcements on cigarettes. Another widely shared data point is that ITC has been cited as the worst-performing BSE200 stock, falling 20% in 2026 so far. Several clips and threads also discuss whether the current price zone offers a favourable risk-reward for long-term investors. At the same time, many comments stress that any conclusion depends on how the cigarette tax hike flows through volumes and margins. The tone across platforms is cautious, with a split between bargain-hunters and traders who are still seeing a downtrend.

The tax trigger that hit sentiment

The most repeated catalyst is the change in indirect taxes on cigarettes going into February 2026. Market commentary notes that the government notified a new tax structure for tobacco and pan masala products on December 31, 2025, and raised GST on cigarettes from 28% to 40%. The new rates were set to take effect from February 1, 2026. CLSA also flagged that indirect taxes increased sharply in February 2026, citing the replacement of the compensation cess with GST and higher excise duties. Social posts describe this as a direct reason the stock lost its defensive reputation in the short run. One summary states the excise duty hike announcement on cigarettes shaved off 12% from the stock in 2026. Another widely shared note is that the stock ended lower in 10 out of 11 trading sessions in early January 2026 after the steep tax hike. The combined messaging is clear: the market repriced cigarette profitability risk quickly, and the stock did not get time to digest the change gradually.

Where the stock is trading relative to highs and lows

Price context is central to the discussion because the move has been large for a heavyweight FMCG name. ITC is stated to be down 27.61% from its 52-week high and trading near its 52-week low. A specific low of Rs 302 is cited as having been hit on February 2, 2026. Separate reports also mention the stock hitting a fresh 52-week low of Rs 337.75 in early January 2026, before recovering to close at Rs 343.25 that day. Another data point in circulation is that ITC ended 2025 at Rs 403 and was trading around Rs 343 as of January 7, 2026, marking a sharp decline. A video segment referenced in social chatter claims the stock crashed 20% in January alone and linked that move to a large market-cap erosion figure. While the exact figures vary by day and source, the shared conclusion is consistent: the stock fell fast and moved into zones that many participants associate with long-term support. That is why price levels like Rs 300, Rs 310 and the Rs 340 to Rs 350 band keep coming up in retail and trader conversations.

What the charts and indicators are signalling

Technical commentary shared widely says ITC is trading below both short-term and long-term simple moving averages. A commonly cited RSI reading is 45.5, described as neither oversold nor overbought, based on one update. Other market notes present a more bearish snapshot, including a 14-day RSI average near 42.8 and a separate RSI print of 22.96 being flagged as oversold. Several analysts quoted in shared posts say the stock is below key moving averages, reinforcing a downtrend framework rather than a stable base. The breach of the Rs 375 to Rs 380 multi-year support zone is repeatedly referenced as technical damage that changed the structure. One view also notes the stock being about 15% below the 200-day SMA after the plunge. Another technical narrative suggests the intensity of the correction could still allow for a temporary relief rally, but only as a corrective move unless resistance breaks decisively. Overall, the charts being discussed do not point to a confirmed reversal, but they do explain why traders are watching for short-covering bounces.

Support, resistance and downside levels being discussed

Price levels are more consistent than predictions across the conversations. Sacchitanand Uttekar of Tradebulls Securities expects the major trend to remain weak, with a final corrective decline towards the Rs 300 zone. He also describes a broader corrective structure since July 2023 and places a projected termination area around Rs 300. From a short-term perspective, the same view allows for a temporary relief rally towards Rs 345 to Rs 350, but frames it as corrective. Dhupesh Dhameja of SAMCO Securities highlights a head-and-shoulders breakdown below the Rs 380 neckline and mentions a measured downside objective near Rs 265. He links this objective to the rising 200-month moving average area around Rs 250 to Rs 260. Siddharth Maurya of Vibhavangal Anukulakara places initial support around Rs 328 and resistance at Rs 388 to Rs 390, with a warning that a close below Rs 328 could intensify the negative trend. Drumil Vithlani of Bonanza also calls out Rs 380 as a strong resistance zone now, with the next major support near Rs 310. Put together, these levels are shaping the market’s near-term playbook: rallies into resistance are being treated cautiously unless the stock reclaims broken supports.

Derivatives cues: what open interest is hinting at

Beyond cash charts, derivatives positioning is being used to gauge whether the fall is exhaustion or fresh bearishness. SAMCO’s Dhameja highlights that the price-open interest structure shows bearish undertones. Despite prices drifting toward the Rs 330 zone, open interest is said to have expanded sharply to about 25.2 crore contracts. This is interpreted as fresh short build-up rather than long liquidation, in that specific commentary. The same view expects a tepid trend for the remainder of the January series. At the same time, the oversold momentum indicators are flagged as a reason minor short-covering rallies can occur. That mix matters for retail traders because it supports two simultaneous outcomes: sharp, quick bounces are possible, but they may fail near well-watched supply zones. The key implication is that derivative data in circulation does not confirm a bottom by itself. It mainly explains why the stock can remain weak even if oversold readings appear on the chart.

Broker targets reset after the cigarette tax shift

Broker notes circulated on social media show a clear pattern of target cuts and conservative assumptions. CLSA retained an Outperform rating but trimmed its price target by 24% to Rs 367 from Rs 485 earlier. CLSA also said ITC would need to raise cigarette prices by about 33% to remain neutral on EBIT per cigarette, and warned steep hikes could weigh on volumes and drag the cigarette division’s EBIT in FY27. Kotak Institutional Equities has a Reduce rating with a price target of Rs 338, linking risk to a blended 25% price hike that is below the 35% it estimates is required to fully offset the tax hike. Kotak’s note also discusses a deliberate trade-off of volume protection over profitability via staggered price increases, and flags heightened competition in the RSFT segment with Marlboro. Nomura’s sum-of-the-parts valuation carries a target price of Rs 318 and forecasts a flat earnings per share CAGR over FY26-28F, with stronger-than-expected volume growth listed as an upside risk. Macquarie is reported to have downgraded ITC to Neutral from Buy and cut its target price by 34% to Rs 330. These calls differ in rating, but they converge on one driver: how quickly ITC can pass on taxes without losing volumes.

Fundamentals that still come up in long-term threads

Even among bearish technical takes, the debate often returns to ITC’s balance sheet and shareholder payouts. Multiple posts mention that ITC is almost debt free. Another commonly quoted metric is a healthy net profit CAGR of 32.7 over three years, as stated in the shared context. Dividend is a key reason the stock remains popular with long-term investors, especially when prices fall and the yield becomes more visible. One widely circulated note says ITC declared and paid a total dividend of Rs 14.35 per share in FY25, with a dividend yield of about 4.10% as of January 6, 2026. A separate clip references an interim dividend of Rs 6.5 per share announced with the latest quarter 3 FY26 results. Some investors also point to quarterly financial snapshots to argue that the business is not only about cigarettes. For example, Q2 FY26 consolidated revenues were stated at Rs 212,559 million versus Rs 215,364 million a year earlier, while consolidated net profit rose to Rs 51,202 million from Rs 49,750 million. These datapoints are being used to support the view that the stock’s rerating is largely tax-driven, even though near-term earnings expectations are being cut by some brokerages.

What investors are watching next in FY27 and FY28

The next phase of the ITC story, as framed in these discussions, is about execution under a higher tax regime. CLSA’s framework suggests FY27 could see pressure if price hikes are steep and volumes soften, with a recovery thesis in FY28 if there is no further tax hike. Kotak’s framework focuses on how a staggered approach to pricing may protect volumes, but still risks a sharp near-term EBIT decline in cigarettes. Competition is also being watched more closely, with Kotak highlighting ITC’s response timing after Godfrey Phillips India’s Marlboro Compact price hike, and what that indicates about market share sensitivity. From a technical standpoint, many traders are treating the Rs 340 to Rs 350 zone as a likely supply area for pullbacks, while supports like Rs 328, Rs 310 and the Rs 300 region remain key reference points. The most bearish projections discussed extend to Rs 265, aligning with the higher timeframe pattern implication and the 200-month moving average zone around Rs 250 to Rs 260. A more constructive path, based on shared technical views, needs the stock to reclaim and sustain above resistances such as Rs 375 or Rs 388 to Rs 390, depending on the analyst. For investors who use ITC for dividends, the key practical question being asked is whether the stock’s income appeal is enough compensation for near-term cigarette EBIT uncertainty. For traders, the question is simpler: whether any rally is a trend change or just a corrective bounce inside a broader downtrend.