Share price of this cigarette company has nearly doubled in 10 months

Shares of Godfrey Phillips hit a new high of Rs 1,842.70 as they rallied 5% on the BSE in Thursday's intra-day trade, and have zoomed 97% from its February low of Rs 937 on the BSE.

Shares of Godfrey Phillips hit a new high of Rs 1,842.70 as they rallied 5 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market. The stock of cigarette company surpassed its previous high of Rs 1,838, touched on November 14, 2022. In comparison, the S&P BSE Sensex was down 0.10 per cent at 61,921.

In the past one month, the stock price of Godfrey Phillips has surged 40 per cent, as compared to 7 per cent rise in the Sensex. The stock price of the company has zoomed nearly 100 per cent from its February low of Rs 937.

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.

Meanwhile, during the first half (April-September) of fiscal 2022-23 (H1FY23), Godfrey Phillips’ earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 100 bps year-on-year to 9.5 per cent from 8.5 per cent in H1FY22.

In H1FY23, the company reported gross sales of Rs 4,667 crore and net profit of Rs 311 crore representing increase of 38 per cent and 48 per cent, respectively, compared to the same period last year. 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.

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.

Gross Sales from 24Seven Convenience Stores (TFS) during H1FY23 grew 25 per cent year on year at Rs 248 crore. The number of stores stands at 116 at the end of September 2022. Increased mobility has helped drive growth in this business, the company said.

Analysts remain positive given its focus on regular size filter tipped (RSFT) and deluxe filter (DSFT) segment supported by addition of 64mm price point under Marlboro and expect strong recovery in footfalls for TFS business as consumer mobility across NCR region has improved significantly.