GST Rate Cuts on FMCG Essentials Drive ITC Shares Higher

Mumbai, September 4, 2025: ITC Ltd shares climbed 2.25% to ₹421 during Thursday’s morning session, following optimism over the consumption boost expected from the GST Council’s recent rate rationalisation. The stock opened at ₹423.95, reached a high of ₹427.00, and fell to a low of ₹415.05. By 11:51 AM IST, ITC shares were trading at ₹415.30, up 0.86% from previous levels. Over the past year, the stock has declined 17%, gained 5% in the last six months, and 2.21% in the past five days. The company maintains a strong market capitalisation of ₹5.24 lakh crore, trading at a P/E ratio of 14.91 and offering a dividend yield of 3.46%.

GST Council Cuts Taxes on FMCG Essentials, Boosting Semi-Urban and Rural Demand

56th GST Council meeting cut taxes on a range of FMCG daily-use items, directly aligning ITC’s consumer staples portfolio:

• Soaps, shampoos, face powders, and shaving creams shifted to 5% GST from 18%
• Toothpaste, toothbrush, and dental floss are taxed at 5%
• Indian breads and UHT milk are exempted, lowering household basket expenses

This relief is likely to boost demand in semi-urban and rural markets, a major growth driver for ITC’s packaged foods and personal care businesses.

The ͏GST ͏Council’s reduction of t͏axes on F͏MCG essentials, i͏nclu͏din͏g soaps, tooth͏pas͏te, and U͏HT mil͏k,͏ has͏ l͏ow͏ered͏ household expen͏ses͏ an͏d ͏aligned with ITC’s con͏sumer staples por͏tfo͏lio. ITC ͏shares͏ traded at ₹42͏1, reflecti͏ng its ͏marke͏t capita͏lization͏ of ₹͏5͏.24 ͏l͏a͏kh ͏cror͏e and dividend yield ͏of 3.46%. The tax rel͏ief highlights potential dema͏nd growth in semi͏-urba͏n and͏ ͏rural market͏s for pac͏kaged foods a͏nd personal͏ ͏car͏e produ͏cts.

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