Cigarette manufacturing companies trade flat post SC decision

The stay on the government notification mandating the Tobacco industry to have 85 percent of the packaging area dedicated to warnings against health risks, was declined by the Supreme Court on Wednesday. 

The stay will have an impact on certain tobacco manufacturers.Tobacco manufacturers have been complaining that the current ruling asking the manufacturers to have 85 percent of the packaging area covered with pictorial warnings will leave no room even to print the brand name of the manufacturer on the package. 

Post clarity on Wednesday the Cigarette manufacturing companies are trading flat to positive on Thursday. ITC is trading positive at 313.25, up by almost 0.14 percent at 10:34 am. Golden Tobacco is trading at 41.50 up by almost 2 percent. 

The stocks have been trading under pressure for more than 3 months, owing to the pending clarity on the pictorial warnings notification by GOI. Godfrey Philip which has delivered 82 percent returns in 1 year time frame has been trading negative for 1 month and has gone down by almost 23 percent. 

GOI earlier had mandated the cigarette manufacturers to have at least 40 percent of the package area of cigarettes to be covered with pictorial warnings.  New notification mandates at least 85 percent instead of 40 percent , with 60 percent being pictorial warning and 25 per cent being textual warning.