ITC's market cap dips below ₹3.4 lakh crore as shares fall 34% in 2026

The downturn began early in the year, with a 20% drop in January, and persisted through subsequent months. By August, the stock touched a three-year low before a modest recovery in September. From its record high of ₹499 in September 2024, ITC's share price has fallen 47%.

Analysts attribute the pressure to elevated input costs, including sugar, copra, and palm oil, alongside regulatory headwinds from increased tobacco taxation. While ITC has raised cigarette prices to offset margin pressures, market participants remain wary of potential volume declines due to higher prices.

Despite the weakness, domestic brokerage 360 ONE Capital Research maintained a 'buy' rating on ITC with a target price of ₹440, citing the potential for price hikes to flow through profitability. The brokerage also noted support from ITC's diversified businesses in FMCG, paperboards, packaging, agri, and technology.

Nomura retained its 'BUY' rating, observing that while most raw material prices softened month-on-month in September, they remained significantly above year-ago levels and product price increases taken by consumer companies in early FY27. Sugar prices, though down 8% month-on-month and 21% from peak, were still up 18% year-on-year, posing margin pressures for ITC and peers.

HDFC Securities maintained an 'ADD' call on the stock, setting a target price of ₹300 for the Nifty 50-listed conglomerate. The brokerages collectively highlighted that pricing power may outweigh volume risks in the current environment, given ITC's staggered price increases across key brands.

The stock has traded in a narrow range over the past two months, reflecting uncertainty over how tax-driven price hikes will affect cigarette sales volumes. Analysts continue to monitor the balance between margin protection and demand elasticity in ITC's tobacco segment.