ITC Ltd jumped as much as 9.6 per cent to a record high, and the stock was the top percentage gainer on the broader NSE index.
The stock jumped as taxation for cigarettes under the new good and services tax (GST) is around 5-6 per cent lower than the previous tax structure, says an analyst at Reliance Securities.
The government's lower tax structure is aimed at tackling large smuggling of cigarettes, he says.
The stock drove Nifty FMCG index up as much as 5.7 per cent to an all-time high. Other cigarette stocks VST Industries Ltd, Godfrey Phillips India, and Kothari Products Ltd rose as much as 8.63 per cent, 5.51 per cent, and 3.2 per cent, respectively.
Up to Friday's close, ITC stock was up 33.9 per cent this year compared with a 23.8 per cent rise in the Nifty FMCG index.