1. At a Glance – Smoke, Cash & Taxes Everywhere
Godfrey Phillips India Ltd (GPIL) is that rare Indian FMCG company where volumes are rising, margins are stable, and the government is your biggest silent partner. As of 30 Jan 2026, the stock trades at ₹2,036 with a market cap of ₹31,747 crore. ROCE sits comfortably at 26.3%, ROE at 19.9%, and debt is a negligible ₹175 crore—basically pocket change for this cash-spewing beast.
Q3 FY26 delivered ₹1,829 crore net revenue and ₹343 crore PAT, up 15% YoY in sales and 8% YoY in profits. The headline, however, is volumes: domestic cigarette volumes grew 25% in 9M FY26. Yes, in a “sin industry” under constant tax threats. Dividend yield stands at 1.56%, but the real dividend is consistency.
The stock has corrected sharply over the last 3–6 months (down ~30%), which has suddenly made investors rediscover “valuation discipline.” The question is simple: is this a temporary nicotine withdrawal or structural de-addiction?
2. Introduction – Welcome to India’s Most Hated Cash Machine
Tobacco stocks are like that rich uncle everyone criticizes but secretly borrows money from. Godfrey Phillips sits right in that zone. Part of the KK Modi Group, GPIL controls ~14% of India’s cigarette market, manufactures and distributes Marlboro in India under exclusive agreements, and quietly prints money while politicians shout about health warnings.
Between FY22 and FY25, revenues jumped from ₹3,562 crore to ₹5,611 crore, while PAT climbed from ₹690 crore to ₹1,072 crore. That’s not cyclical luck—that’s pricing power plus addiction economics.
Yet, GPIL isn’t just cigarettes anymore. It flirted with retail (24Seven), burned its fingers, booked
a ₹60 crore impairment, and exited. It also runs confectionery brands and distributes Ferrero products, though these are currently rounding errors in the P&L.
So what are we dealing with here?
A dying industry? Or the most predictable cash-flow engine in Indian FMCG?
3. Business Model – WTF Do They Even Do?
Let’s simplify.
A. Tobacco Business – The Real Boss (93% of Q1 FY25 revenue)
- Domestic Cigarettes (≈70%)
GPIL manufactures and sells Marlboro in India under exclusive procurement and supply agreements with Philip Morris International. Marlboro is not just a cigarette—it’s a premium pricing weapon. - International Business (≈23%)
This includes:- Own-brand cigarettes (Jaisalmer, Stellar, Originals, Black Jack)
- Contract manufacturing
- Unmanufactured tobacco exports to 40+ countries
Unmanufactured tobacco exports alone touched ₹1,255 crore in 9M FY26, contributing 22% of net sales.
B. Non-Tobacco – Side Quest (≈7%)
- Confectionery brands like Funda Goli, Imli Naturalz
- Distribution of Ferrero products (Kinder Joy, Tic Tac)
- Retail (24Seven) – Exited, thankfully
If tobacco is Shah Rukh Khan, non-tobacco is the side actor hoping for a Netflix spinoff.
4. Financials Overview – Follow the Nicotine Trail
Quarterly
