Godfrey Phillips Gains for 3rd Consecutive Session; Reports Strong Q3 Numbers

Shares of Godfrey Phillips surged for the third consecutive session on the back of strong December quarter earnings. Though the stock opened with a gap-down of 2.79%, it withered off its losses to clock an intraday high of 7,687.70 apiece, down 2.79%.

Net profit for the December quarter came at ₹316 crore, up 48.7% YoY, while revenue from operations jumped by 27.3% YoY at ₹1,591 crore. The substantial growth can be attributed to a surge in the core business of cigarettes, tobacco, and related products.

EBITDA surged by 57.6% to ₹350 crore, wherein EBITDA margins surged by 440 basis points YoY to 22.6%.

Notably, the Indian cigarette industry is facing several challenges amid higher taxes, stricter regulations and spike in illegal trading, thereby impacting legal manufacturers.

On the other hand, Mirae Asset Sharekhan expects strong volume growth, on the back of the government's crackdown on illegal cigarette sales and moderating price increases across product portfolios.