Godfrey Phillips shares fall 6% as Q1 net profit declines over 44% amid tax-led price increase

Shares of cigarette-maker Godfrey Phillips slipped 6% to Rs 2,119.10 apiece on the BSE on Tuesday after the company reported a 44.3% year-on-year decline in its Q1 net profit to Rs 198.39 crore. Net revenue from operations for the firm fell 18.8% to Rs 1,206 crore during the June quarter of the current financial year, largely due to an excise duty outgo of Rs 2,614 crore.

However, the company's gross revenue more than doubled year-on-year to Rs 3,820 crore, while the gross profit margin contracted to 7.8% from 15.3% a year ago. Total expenses also more than doubled to Rs 3,675 crore during the June quarter.

Including other income, Godfrey Phillips' total income more than doubled year-on-year to Rs 3,897.83 crore in Q1 FY27.


The earnings were released in the post-market hours of Monday.

Despite a significant tax-led price increase, the company’s domestic cigarette sales volume slipped by 2% during the quarter over the corresponding period of last year, as per the company’s earnings report. The unmanufactured tobacco export sales were at Rs 248 crores, accounting for 7% of the company's net sales.

What did the management say?

“The higher tax burden has not only impacted industry profitability but also contributed to the growth of illicit trade, which remains a significant concern for the legal cigarette industry,” said CEO Sharad Aggarwal in the company’s report, adding that this reflects the resilience of their brands and distribution network.

About Godfrey Phillips

Godfrey Phillips is the flagship company of the KK Modi Group. It is a Fortune 500 organisation, with significant market presence across Latin America, the Middle East, Southeast Asia and Eastern Europe in around 30 countries.

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