New Delhi, Oct. 5 -- Indian tobacco and cigarette manufacturing companies like ITC, Godfrey Phillips India, and VST Industries faced a significant pressure in the first quarter as the higher tax burden squeezed margins and affected profitability.

According to analysts, with companies now having more time to implement price increases and pass on higher taxes to consumers, some sequential improvement in margins in Q2 FY27 is expected.

Indian tobacco companies have been dealing with a major structural change in taxation. The earlier framework of 28% GST plus variable Compensation Cess has been replaced by a uniform 40% GST slab, along with higher length-based Additional Excise Duties ranging from Rs.2,050 to Rs.8,500 per 1,000 sticks. NCCD...