Godfrey Phillips India Stock Crash: This stock, which gained 25% in three days, saw a sharp decline today, falling by 5%.:According to the brokerage, based on cigarette EBIT and price-to-earnings ratio (-25% EBIT growth, 10x P/E), the bear case is expected to fall by about 5%.

News Topical, Digital Desk : Godfrey Phillips India Stock Crash: Shares of cigarette maker Godfrey Phillips India fell nearly 5% on Friday, February 20th. This halted three consecutive sessions of gains. The stock had surged 25.3% in the previous three trading sessions.

The stock was the biggest loser in the midcap category on Friday, falling 4.9% to an intraday low of ₹2,400.

At around 10:25 am, it was trading at ₹2,419.1 with a decline of 4.1%. However, the stock has gained 13.4% in the last one month. At the same time, it has declined by 34.7% in six months, whereas in the last one year, it has gained 21.2%.

Cigarette companies have increased prices

Cigarette manufacturers have increased the prices sharply to compensate for the increased excise duty, which has improved the EBIT per stick. According to the report, Godfrey Phillips India has increased the price of 'Marlboro Compact' from ₹9.5 per stick to ₹11.5 per stick.

HSBC's view on ITC On the other hand, brokerage firm HSBC on Friday maintained a 'hold' rating on ITC and gave a target price of ₹360 per share. HSBC said that market research indicates that ITC has raised prices by 20-30% in some of its portfolio to compensate for the increased tax. According to the brokerage, based on cigarette EBIT and price-to-earnings ratio (-25% EBIT growth, 10x P/E), a bear case expects a decline of around 5%. However, HSBC also said that the stock has limited room for decline, but there is no strong trigger for a rally at present. At around 10:25 am, ITC shares were trading almost flat at ₹326.3.