In the past three months, the stock has surged 63 per cent after the company reported 48 per cent year-on-year (YoY) jump in its net profit at Rs 311 crore in the first half (April-December) of the current financial year 2022-23 (H1FY23). The company's gross sales rose 38 per cent YoY at Rs 4,667 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 100 bps YoY to 9.5 per cent from 8.5 per cent in H1FY22.
The focused approach of the company and improvement in external environment has helped company achieve these objectives. The management hopes to carry the momentum forward in remaining part of FY23.
The number of stores stood at 116 at the end of September 2022. Increased mobility has helped drive growth in this business, the company said.
Godfrey Phillips has delivered strong cigarette domestic volume growth in H1FY23. The company’s topline is supported by increase in export of unmanufactured tobacco and cigarettes resulting in International Business contributing Rs 566 crore, a growth of 100 per cent over corresponding period last year. The company’s main brands include Four Square, Red & White, Cavanders and Stellar & Focus.
In October 2022, Godfrey Phillips divested from the chewing business by sale/ assignment of associated trademarks and certain non-current assets. The management said this would help the company to focus more on cigarette business.
The cigarette demand started to recover with the opening of economy, increase in mobility and resumption of work in offices. The market serviceability also improved with the removal of inter-state restrictions and has led to recovery in the sales and demand of cigarettes.
Government continues to curb the trade of illegal cigarette through regular raids and seizures. It also focuses on stabilizing the domestic legal cigarette market and moderation in cigarette taxation may help optimize tax collection and reduce shift towards cheaper illicit cigarettes, Godfrey Phillips India said in its FY22 annual report.
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