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News for India > Business > Godfrey Phillips to ITC: Cigarette makers puff up strong Q1 numbers — What’s igniting this growth? | Stock Market News
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Godfrey Phillips to ITC: Cigarette makers puff up strong Q1 numbers — What’s igniting this growth? | Stock Market News

Last updated: August 5, 2025 6:12 pm
19 hours ago
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Indian cigarette makers delivered a strong performance in the June-ending quarter, with numbers coming in above Street estimates, driven by resilient volumes, continued premiumization, and innovations. The upbeat results also led to a strong spike in their shares despite the Indian stock market remaining under severe volatility.

Godfrey Phillips, which owns cigarette brands like Four Square, Red & White, and Cavanders, delivered robust domestic cigarette sales volume growth in Q1 FY26, reaching 1,903 million per month, marking an increase from 1,497 million per month in Q1 FY25.

Also Read | Godfrey Phillips shares jump 9% on strong Q1 results, bonus share announcement

This reflects continued growth in quarterly sales and builds on the consistent upward trend observed throughout FY25. Against the backdrop of strong volume growth, the company reported a 36.5% YoY jump in revenue to ₹1,486 crore, while higher production costs and expenses hit the company’s margins. However, net profit grew by 55.9% YoY to ₹356 crore.

It further strengthened its partnership with Philip Morris International for the manufacture and distribution of Marlboro brand cigarettes in India. The company has been steadily gaining domestic market share while maintaining focus on its international business, which contributed 25% of net sales during the reporting quarter.

Also Read | Godfrey Phillips announces 2-for-1 bonus issue | Everything you need to know

The company has a significant market presence across Latin America, the Middle East, Southeast Asia, and Eastern Europe in around 35 countries.

Meanwhile, the strong cigarette demand also led ITC to deliver better-than-expected numbers in the June quarter. ITC’s cigarette business grew 7.6% YoY to ₹8,520 crore, driven by strategic portfolio and market interventions focused on competitive belts.

ITC strengthened its FMCG Cigarettes segment with multiple new launches and portfolio enhancements. The company introduced new variants such as Classic Connect, American Club Clove Mint, and Gold Flake Indie Mint while reinforcing its existing portfolio with brands like Scissors, Flake Special, and Silk Cut Red.

Although ITC is larger than Godfrey Phillips in scale, Godfrey Phillips is challenging ITC’s dominance in many markets, particularly in southern India, where it plans to expand its Marlboro brand.

Also Read | ITC Q1 net profit up 2%, cigarette, agri segments drive revenue

Analysts also favor Godfrey Phillips, citing the resolution of the family dispute and expecting the firm to rank among the fastest-growing FMCG players in India over the next three years.

Godfrey Phillips shares jump 90% in 2025 

Dalal Street also seems to favor the company’s growth targets, as its shares have gained 90% so far this calendar year, building on a strong gain of 147% registered in the previous calendar year.

Meanwhile, ITC shares have fallen 9.3% in the same period. Though ITC’s cigarette business is performing well, its other FMCG segments, excluding cigarettes, are facing margin compression amid rising input prices. 

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.



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