Godfrey Phillips India shrugs off sin tax worries; zooms 17%, hits new high

Business Standard

2 days ago

According to reports, the Government has indicated that tax incidence will remain the same for sin goods (including cigarettes and carbonated beverages).
SI Reporter Mumbai
Godfrey Phillips India share price today
Shares of Godfrey Phillips India hit a new high of ₹11,450, as they zoomed 17 per cent on the National Stock Exchange (NSE) in Wednesday's intra-day trade amid heavy volumes.
The stock of the cigarettes and tobacco products maker surpassed its previous high of ₹11,444, which it touched on August 7, 2025. It has bounced back 20 per cent from Tuesday's low, shrugging off the media reports that the government might increase the tax slab on certain sin products, including tobacco products, to 40 per cent from 28 per cent currently in the upcoming GST council meet.
At 02:01 PM, Godfrey Phillips India was trading 15 per cent higher at ₹11,232.50, as compared to a 0.34 per cent rise in the Nifty 50. The average trading volumes on the counter jumped multiple-fold, with a combined 1.72 million shares representing 3.3 per cent of the total equity of the company that have changed hands on the NSE and BSE.
Why did Godfrey Phillips India shares rally today?
According to media sources, the Government has indicated that tax incidence will remain the same for sin goods (including cigarettes and carbonated beverages).
This is positive for cigarette companies. It indicates that despite the GST rate being hiked to 40 per cent from 28 per cent on sin goods, there won't be any incremental increase final tax outlay to cigarette manufacturers such as ITC and Godfrey Phillips, ICICI Securities said in a note.
Godfrey Phillips had delivered robust domestic cigarette sales volume growth in the April to June 2025 quarter (Q1FY26). The company achieved strong financial performance, reported a 36.5 per cent increase in consolidated net revenue at ₹1,486 crore and consolidated net profit from continuing operations rose by 25 per cent to ₹356 crore.
"The company's growth was supported by higher domestic cigarette volumes and deeper penetration in international markets for unmanufactured tobacco. Our longstanding partnership with Philip Morris International for the iconic 'Marlboro' brand, along with a growing relationship with Ferrero India in the confectionery business, continues to strengthen the company's market position and to diversify revenue streams," the management said in its FY25 annual report.
The domestic cigarette industry outlook in India remained reasonably optimistic. While the industry continued to grapple with challenges such as escalating tobacco prices and input costs, it has shown resilience amidst global geopolitical tensions and supply chain disruptions. Improving macroeconomic indicators, coupled with the prospects of a normal monsoon, stable tobacco prices and a sustained recovery in rural demand, are expected to drive moderate volume growth in the near term.
The domestic cigarettes industry in the past was affected by a sustained rise in taxes and regulatory regime, along with a sharp hike in illegal trade in the past few years, especially at the premium end, which continues to pose significant challenges to the legal cigarettes industry.
However, in recent times, the government has undertaken stringent actions to curb illicit cigarette sales. This, along with lower price hikes in the cigarette portfolio, will help cigarette companies post better volume growth, Mirae Asset Sharekhan said in ITC's Q1 result update.