Prabhudas Lilladher has downgraded ITC's rating to 'reduce' with a target price of Rs 348, citing the significant impact of increased cigarette excise duties. The brokerage estimates a 2-3% price hike and a 12.5% volume hit in FY27 due to the duty changes, which shift the government's stance on taxation. While lower leaf tobacco prices and some price increases may aid margins, overall profitability is expected to suffer in the medium term.