Godfrey Phillips India Limited

Consumer Defensive — Tobacco · NSE

₹1,852.00+₹14.50 (+0.79%)

DalalBaazaar Score

77 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Godfrey Phillips India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Godfrey Phillips India Limited, together with its subsidiaries, manufactures and trades cigarettes, tobacco products, and related products in India and internationally. It operates through Cigarette, Tobacco and Related Products; and Others segments.

IndustryTobacco

SectorConsumer Defensive

Employees1,121

Annual revenue₹6,353 Cr

How does it make money?

Turns over ₹6,353 Cr a year. Of every ₹100 of sales, about ₹24 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 1,121 employees supports ₹5.67 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.67 Cr

Who are its competitors?

The closest listed comparisons in its industry are ITC LTD, HINDUSTAN UNILEVER LTD., NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 30.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 24.6% against a peer median of 51.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE51.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +80% while net margin moved +23% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+80%

Margin effect+23%

DalalBaazaar Score

77/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.39 — historically steadier than the index
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

81/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

21.1x

3Y Median

30.9x

40 monthly readings · mean 31.8x · range 15.2x–53.6x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 30.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 51% below the peer median of 43.3x.

vs. its own history

Cheap

30.9x median over 40 months · -32%

vs. sector peers

Cheap

43.3x median of 4 peers · -51%

vs. generic bands

Fair

15x–35x

EV/EBITDA

15.1x

PEG

0.70

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 26.3% to 30.3% over 3 years.
Debt is being paid down
Total debt is down 34% over 3 years.
Return on equity is rising
ROE has improved from 19.5% to 24.6%.
Return on capital is rising
ROCE has improved from 23.0% to 30.0%.
High return on capital employed
ROCE of 30.0% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 3.76x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 507% against revenue up 80% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 144% against revenue up 80% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 26.3% to 30.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 34% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 51% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 3.76x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 507% against revenue up 80%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 16% a year✓ 21.6% CAGR
Latest reported year was -18.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 30.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹206 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 27%✓ 30.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹28,886 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

21.1x

Fair

Fairly valued against the generic band

P/B Ratio

4.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹87.68

Profitable

Profitable on a per-share basis

ROE

24.6%

Strong

Strong capital efficiency

ROCE

30.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.76x

High

High leverage

Revenue Growth (YoY)

-18.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-44.3%

Falling

Profits are shrinking

Dividend Yield

2.70%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹206 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

16.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.2%

Average

Average margins

Net Margin

22.4%

Good

Strong bottom-line conversion

Current Ratio

2.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1893.2 / 2012.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,530 Cr	₹3,969 Cr	₹5,578 Cr	₹6,353 Cr	+21.6%
EBITDA	₹928 Cr	₹1,125 Cr	₹1,453 Cr	₹1,928 Cr	+27.6%
EBITDA Margin	26.3%	28.3%	26.0%	30.3%	—
PAT (Net Profit)	₹690 Cr	₹883 Cr	₹1,072 Cr	₹1,526 Cr	+30.3%
EPS	₹44.27	₹56.62	₹68.94	₹97.84	+30.3%
ROE	19.5%	20.9%	20.4%	24.6%	—
ROCE	23.0%	25.2%	26.8%	30.0%	—
Total Debt	₹354 Cr	₹344 Cr	₹177 Cr	₹232 Cr	-13.1%
Free Cash Flow	₹649 Cr	₹190 Cr	-₹61 Cr	₹206 Cr	-31.8%

🟢 Revenue has grown at 21.6% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟢 EBITDA Margin has risen from 26.3% to 30.3% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 30.3% a year over 3 years.

🟢 EPS has grown at 30.3% a year over 3 years.

🟢 ROE has risen from 19.5% to 24.6% over 3 years (+5.1 pts).

🟢 ROCE has risen from 23.0% to 30.0% over 3 years (+7.1 pts).

🟢 Total Debt has shrunk at 13.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 31.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,310 Cr

Total Liabilities

₹2,091 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹518 Cr

Capex

-₹312 Cr

Shareholding (proxy)

Institutional Holding

10.1%

Insider Holding

73.5%

Corporate Actions

Dividend Rate

₹50

Ex-Dividend Date

11 Aug 2026

Peer Comparison

Company	P/E	ROE
ITC LTD	16.6x	27.4%
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive1 mixed4 general

Godfrey Phillips profit dips 44% in Q1FY27 as revenue doubles on tax shift

scanx.trade, 18 Oct

GODFREY PHILLIPS INDIA LT Option Chain - Live GODFREY PHILLIPS INDIA LT Option Chain Data, OI & Price

Upstox, 16 Oct

Godfrey Phillips India Ltd. (GODFRYPHLP) Share Price Rise Streak: stock rises in second straight session

Univest, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Cigarette Stock In Focus: Godfrey Phillips Share Price Slips 2% In Trade

NDTV Profit, 11 Aug

Three Days Left To Buy Godfrey Phillips India Limited (NSE:GODFRYPHLP) Before The Ex-Dividend Date

Simply Wall Street, 07 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Godfrey Phillips India Share Price: Price Action, Valuation

Univest, 14 Oct

Watch Items

Revenue growth is negative (-18.9%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

MiddlingRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑