The World Bank has raised its forecast for India’s economic growth in FY27 to 7.1 per cent from 6.6 per cent, citing stronger-than-expected economic activity despite geopolitical and trade uncertainties.
I’ve been into option selling lately and developed an automated system so I don't constantly check the margins used/available on the system, and since I trade indices with sufficient margin, I didn’t pay much attention to the changes around single-stock derivatives.
Only last night did I realise SEBI has now removed margin benefits even for index spreads on expiry.
I have sufficient margin and a properly hedged spread, yet we’re still being forced to keep huge amounts of extra capital to cover ELM on expiry days now.
Every small benefit is being stripped away, making it harder to scale a system that already plays by the rules. Extremely frustrating.
Taking away leverage from a business is the best way to kill it. A good trader could have generated good profits before all the regulations that came in post-covid. Now even if you have the skills, you can't do much.
No wonder FIIs aren’t looking at India.
Current market levels are nearly aligned with the march low levels and 2y support which ideally makes good quality stocks available at cheap price.
let's share with the community and get feedback
ITC's shares have fallen from about ₹400 a year ago to ₹265, a drop of about a third. Its June 2026 quarter sales look 28% higher, but that is mostly a bigger cigarette tax passing through the books. After the tax, cigarette profit fell 35% and company profit fell 27%. The other businesses are doing better, but they are still too small to make up for it.
The fall in numbers
ITC closed at about ₹400 in early October 2025. On 6 October 2026 it closed at ₹265, about 34% lower. It touched a low of about ₹255 on 1 October 2026.
The damage came in steps. The share was ₹403 on 31 December 2025. On 1 January 2026 it fell almost 10% to ₹364 in a single day, with about 28 crore shares traded, around 40 times a normal day. It kept sliding through the year: ₹309 at the end of January, ₹292 in March, ₹280 in May and ₹256 by the end of September.
What happened: a big new tax on cigarettes
A special extra tax on cigarettes, collected with GST, came to an end. The government replaced it with a much higher excise duty on cigarettes from 1 February 2026. The sharp fall on 1 January was the market reacting as this became clear.
Cigarettes are where ITC makes most of its money. In the year to March 2026, cigarettes earned about ₹21,051 crore of the ₹25,139 crore profit from all its businesses, about 84%. So any hit to cigarettes hits the whole company.
Why sales went up but profit went down
In April–June 2026, ITC's main company reported sales of ₹26,794 crore, up 28% from ₹20,922 crore a year earlier. That sounds great, but it is mostly tax. The company's own notes say the new excise duty is counted inside sales, while the old tax was not, so the figures are not comparable.
Excise duty paid jumped from ₹1,309 crore to ₹10,036 crore in a year. Take that out and sales were about ₹16,760 crore, down from about ₹19,610 crore.
The bottom line tells the real story. Profit fell from ₹4,911 crore to ₹3,579 crore, a drop of 27%. Earnings per share fell from ₹3.93 to ₹2.86.
Cigarettes took the hit
Cigarette sales including the tax rose from ₹8,520 crore to ₹15,384 crore. But cigarette profit fell from ₹5,145 crore to ₹3,341 crore, down 35%.
When tax goes up this much, ITC must choose between raising prices, which can push smokers to cheaper or illegal cigarettes, and absorbing part of the tax, which cuts its margin. The numbers suggest it is facing some of both.
The rest of ITC is doing fine, but it is small
The non-cigarette consumer business (biscuits, atta, noodles, soaps and more) grew sales from ₹5,787 crore to ₹6,482 crore, up 12%, and profit from ₹396 crore to ₹479 crore, up 21%.
Paper and packaging profit rose from ₹163 crore to ₹224 crore. The farm products business made ₹354 crore, down from ₹434 crore.
Together these businesses made about ₹1,050 crore of profit in the quarter. Cigarette profit fell by about ₹1,800 crore. The growing businesses cannot yet fill that hole.
ITC is also still buying: it took control of Sproutlife Foods, raised its stake in baby-care brand Mother Sparsh, and its IT arm agreed on 31 August 2026 to buy 22% of Happiest Minds Technologies.
Is it cheap now?
At ₹265, ITC trades at about 17.5 times its profit per share of the last four quarters (about ₹15.1). That is low for ITC, which used to trade well above 20 times.
But the price is low because the profit itself shrank. If cigarette profit stays down, the share is not as cheap as it looks.
Big investors still hold on. In June 2026 foreign investors owned about 34% of ITC and Indian institutions about 49%, including 16.5% by mutual funds.
The bottom line
ITC did not fall because the business broke. It fell because the government took a much bigger slice of every cigarette sold, and cigarettes are most of ITC's profit.
The key things to watch are whether cigarette profit recovers as prices adjust, and how fast the food and personal care business grows. Until one of those changes, the share may stay under pressure.
How are y'all preparing for this and how do you think the market gets affected by this? Considering everyone is pretty much expecting a 25 points hike.
Been trading and investing for almost a decade. Options for about four years. Overall resulted in loss. But finally switched to this systematic trading in August and ended with a green month. Not a fake post. Knowledge shared is knowledge gained. Cheers
I should have booked the profit in Waaree and tata tech atleast when I had time...could have used that profit to reduce some home loan emis 😭😭
From now on, some part of investment will go to reduce 1 emi each month atleast till market nifty comes above 24k atleast