MUMBAI (Reuters) - Shares in cigarette makers fell on Saturday after the budget raised excise duty on cigarettes by 25 percent for cigarettes of length not exceeding 65 mm, and by 15 percent for cigarettes of other lengths.
ITC Ltd slumped 8.2 percent while VST Industries lost 3.7 percent.
Although cigarette demand is relatively inelastic, analysts have said higher taxes would hurt volume growth and force companies to diversify faster.
(Reporting by Abhishek Vishnoi; Editing by Clara Ferreira Marques)