Cigarette Stocks Post Gains: ITC, Godfrey Phillips, VST Industries Rise Up to 15% Amid Industry Developments
Detailed Analysis
VST Industries Ltd Posts 120% YoY Increase in Net Profit
VST Industries Ltd has reported a sharp 120% year-over-year (YoY) increase in net profit for the March quarter, totaling Rs 116.7 crore as compared to Rs 53 crore in the same period last year. This remarkable growth has sparked investor interest in the company, with its shares rising 15% on April 17.
The company's revenue grew 30.9% YoY to Rs 457 crore, up from Rs 349 crore in the year-ago period. Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at Rs 208 crore, a significant increase from Rs 69.5 crore reported in the year-ago period. The EBITDA margin expanded to 45.6% from 19.9% on an annual basis, indicating improved operational efficiency.
A closer look at the company's core business reveals that net cigarette revenue rose to Rs 1,151 crore versus Rs 921 crore in the corresponding period. The revenue from cigarette operations stood at Rs 631 crore in Q4FY26 compared with Rs 337 crore in Q4FY25. However, revenue from unmanufactured tobacco was Rs 58 crore as against Rs 116 crore in the year-ago period.
Cigarette volumes averaged 667 million units per month in Q4FY26, compared with 647 million units in the same quarter last year.
Comparison of Q4FY25 and Q4FY26 Results
| Metric | Q4FY25 | Q4FY26 | % Change | | --- | --- | --- | --- | | Revenue | Rs 349 crore | Rs 457 crore | 30.9% | | EBITDA | Rs 69.5 crore | Rs 208 crore | 199.7% | | EBITDA Margin | 19.9% | 45.6% | 128.2% | | Net Cigarette Revenue | Rs 921 crore | Rs 1,151 crore | 25.1% | | Cigarette Volumes (avg. per month) | 647 million units | 667 million units | 3.1% |
The company's improved performance has had a rub-off effect on larger cigarette stocks, with ITC and Godfrey Phillips rising 1.5% and 4%, respectively. Piyush Srivastava, Managing Director, VST Industries, said that while the company achieved robust volume recovery in 2025, it will face a challenging year due to extraordinary tax increases. He emphasized the company's commitment to creating superior value for consumers and stakeholders.
Investor Takeaway
Investors should consider the growth prospects of cigarette stocks in the industry.
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