Godfrey Phillips shares jump 31% in 3 days: What is driving rally in cigarette stock?
Godfrey Phillips delivered domestic cigarette sales volume growth of 25 per cent in the first nine months FY26 over the corresponding period of last year.
- Feb 19, 2026,
- Updated Feb 19, 2026 10:48 AM IST
Godfrey Phillips India Ltd climbed over 6 per cent in Thursday's trade, taking its three-day rise to 31 per cent, as analysts noted that cigarette makers have implemented decisive price hikes to pass on the recent tax increases. At 10.28 am, Godfrey Phillips India was trading 1.79 per cent higher at Rs 2,524.10 on BSE. The scrip earlier jumped 6.26 per cent to hit a high of Rs 2,635.15.
Vinod Nair, Head of Research at Geojit Investments said with the pricing adjustments now in place, near-term margin pressures appear more manageable for cigarette makers. "December-quarter results indicate that the earlier weakness was largely tax-driven rather than reflective of any structural slowdown in demand. While higher retail prices could temporarily weigh on volumes, cigarette companies have historically displayed strong pricing power, allowing them to protect profitability even in elevated tax regimes," Nair said.
The recent valuation correction may therefore present selective opportunities for investors, particularly in companies capable of sustaining margins and earnings through calibrated price actions, Nair said without offering any name.
The government had announced a significant hike in cigarette taxation effective February 1, 2026. The revised structure replaced the earlier 28 per cent GST plus compensation cess with a higher 40 per cent GST and introduced a per-stick excise duty based on cigarette length.
Godfrey Phillips offers own brand cigarettes, unmanufactured tobacco and contract manufactured cigarettes. Godfrey Phillips delivered domestic cigarette sales volume growth of 25 per cent in the first nine months FY26 over the corresponding period of last year.
During the period, unmanufactured tobacco exports reached Rs 1,255 crore, contributing 22 per cent of its net sales. The company is looking to accelerating growth in this segment. Overall, Godfrey Phillips recorded consolidated gross sales value of Rs 12,805 crore and net profit from continuing operations of Rs 1,005 crore for the first nine months of FY26, representing increase of 22 per cent and 17 per cent, respectively, when compared to the corresponding period in last year.
Godfrey Phillips India Ltd climbed over 6 per cent in Thursday's trade, taking its three-day rise to 31 per cent, as analysts noted that cigarette makers have implemented decisive price hikes to pass on the recent tax increases. At 10.28 am, Godfrey Phillips India was trading 1.79 per cent higher at Rs 2,524.10 on BSE. The scrip earlier jumped 6.26 per cent to hit a high of Rs 2,635.15.
Vinod Nair, Head of Research at Geojit Investments said with the pricing adjustments now in place, near-term margin pressures appear more manageable for cigarette makers. "December-quarter results indicate that the earlier weakness was largely tax-driven rather than reflective of any structural slowdown in demand. While higher retail prices could temporarily weigh on volumes, cigarette companies have historically displayed strong pricing power, allowing them to protect profitability even in elevated tax regimes," Nair said.
The recent valuation correction may therefore present selective opportunities for investors, particularly in companies capable of sustaining margins and earnings through calibrated price actions, Nair said without offering any name.
The government had announced a significant hike in cigarette taxation effective February 1, 2026. The revised structure replaced the earlier 28 per cent GST plus compensation cess with a higher 40 per cent GST and introduced a per-stick excise duty based on cigarette length.
Godfrey Phillips offers own brand cigarettes, unmanufactured tobacco and contract manufactured cigarettes. Godfrey Phillips delivered domestic cigarette sales volume growth of 25 per cent in the first nine months FY26 over the corresponding period of last year.
During the period, unmanufactured tobacco exports reached Rs 1,255 crore, contributing 22 per cent of its net sales. The company is looking to accelerating growth in this segment. Overall, Godfrey Phillips recorded consolidated gross sales value of Rs 12,805 crore and net profit from continuing operations of Rs 1,005 crore for the first nine months of FY26, representing increase of 22 per cent and 17 per cent, respectively, when compared to the corresponding period in last year.