Godfrey Phillips India Q1 FY26 – 36% Sales Boom, 25% Profit Pop, But P/E at 45? Cigarettes Cost Less Than This Valuation Smoke
1. At a Glance
Godfrey Phillips India (GPI) is like that relative who never admits they smoke, but you always catch the Marlboro packet peeking out. With ₹6,000+ Cr sales, ₹1,200+ Cr PAT, 26% ROCE, and 20% OPM, the company is puffing profits like a chimney. But the P/E at 44.8x? That’s more inflated than cigarette MRP in airport duty-free shops. And just to add more spice, they announced a 2:1 bonus issue—because apparently Marlboro isn’t addictive enough, shareholders need free shares too.
2. Introduction
Meet Godfrey Phillips India, the crown jewel of the KK Modi group, the Marlboro mafia of India. The company controls ~14% of the Indian cigarette market, which in desi terms means: “Not as big as ITC, but still enough to fund a luxury bungalow in Delhi.”
Their business is 93% tobacco, 7% non-tobacco. Non-tobacco is mostly Funda Goli (those candies your paanwala sells for 50 paise) and the now-abandoned 24Seven stores. After burning ₹60 Cr in losses, they pulled the plug on retail—thank god, because running convenience stores in India is like running Tinder for arranged marriages. High hopes, low matches.
Meanwhile, tobacco exports are booming, with unmanufactured tobacco sales growing 114% between FY22–FY24. Operating margins dipped from 24% → 20%, but who cares? Cigarette companies are like Indian weddings—margins don’t matter, the cash keeps flowing.
The shareholder pitch is clear: smoke more, pay taxes, and let profits burn bright. But does a 45x multiple make sense for a cigarette company? Let’s light up the numbers.
3. Business Model – WTF Do They Even Do?
Domestic Cigarettes (~70% of sales): Exclusive license for Marlboro, plus homegrown brands like Originals, Stellar, Jaisalmer. Basically, they sell coolness at a 90% tax rate.
International Tobacco (~23%): Contract manufacturing, exports, own brands across 40+ countries. A desi cigarette company doing business in Eastern Europe—Bollywood plotline vibes.
Non-Tobacco (7%):
Confectionery: Funda Goli, Imli Naturalz, Tic Tac (via Ferrero deal). If you don’t smoke, at least chew sugar.
Retail (24Seven stores): Shut down in FY25 after years of bleeding. ₹60 Cr impairment = the “quit smoking” attempt of their corporate life.
