VST Industries Limited

Consumer Defensive — Tobacco · NSE

₹201.74−₹0.13 (−0.06%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

VST Industries Limited engages in the manufacturing, trading, and marketing of cigarettes, tobacco, and tobacco products in India and internationally. It sells unmanufactured tobacco.

IndustryTobacco

SectorConsumer Defensive

Employees712

Annual revenue₹1,461 Cr

How does it make money?

Turns over ₹1,461 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹29 left at the operating level before interest, tax and depreciation. Each of its 712 employees supports ₹2.05 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.05 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 23.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 20.2% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +13% while net margin moved -21% 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+13%

Margin effect-21%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.2% — barely ahead of inflation
✗ Profit has declined at 3.7% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -13.9% is below the longer-term trend — momentum is fading
✗ Profit fell 24.2% in the latest year

Quality vs. Valuation

Company Quality

66/ 100

Good

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

Valuation

84/ 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

12.3x

3Y Median

15.9x

40 monthly readings · mean 16.1x · range 11.7x–23.4x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 23% below its 3y median of 15.9x. 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 72% below the peer median of 43.3x.

vs. its own history

Cheap

15.9x median over 40 months · -23%

vs. sector peers

Cheap

43.3x median of 4 peers · -72%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 23.7% 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 Attention2

Return on equity is falling
ROE has dropped from 27.7% to 20.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.8% to 23.7% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Inventory building faster than salesFinancial
Inventory up 93% against revenue up 13% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.7% 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.
Priced below its own history
The stock trades 23% 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 72% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 4.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 27.7% to 20.2%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 27%✓ 29.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 4.2% CAGR
Latest reported year was -13.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹176 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 21%✓ 23.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 15.9x✓ 12.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 10 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ 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

6 good · 3 neutral · 2 weak

Market Cap

₹3,420 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.3x

Cheap

Cheap against the generic band

P/B Ratio

2.37x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹16.41

Profitable

Profitable on a per-share basis

ROE

20.2%

Strong

Strong capital efficiency

ROCE

23.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-13.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-24.2%

Falling

Profits are shrinking

Dividend Yield

5.95%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹176 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

10.1x

Improving

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

Operating Margin

15.0%

Good

Healthy core-business profitability

Net Margin

19.6%

Good

Strong bottom-line conversion

Current Ratio

3.16

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

203.4 / 208.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

34.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,290 Cr	₹1,417 Cr	₹1,395 Cr	₹1,461 Cr	+4.2%
EBITDA	₹361 Cr	₹356 Cr	₹159 Cr	₹425 Cr	+5.6%
EBITDA Margin	28.0%	25.2%	11.4%	29.1%	—
PAT (Net Profit)	₹327 Cr	₹302 Cr	₹290 Cr	₹292 Cr	-3.7%
EPS	₹19.25	₹17.75	₹17.1	₹17.21	-3.7%
ROE	27.7%	24.1%	22.0%	20.2%	—
ROCE	30.8%	27.4%	17.4%	23.7%	—
Free Cash Flow	-₹222 Cr	₹73 Cr	₹152 Cr	₹176 Cr	—

🟢 Revenue has grown at 4.2% a year over 3 years.

🟢 EBITDA has grown at 5.6% a year over 3 years.

🟢 EBITDA Margin has risen from 28.0% to 29.1% over 3 years (+1.1 pts).

🔴 PAT (Net Profit) has shrunk at 3.7% a year over 3 years.

🔴 EPS has shrunk at 3.7% a year over 3 years.

🔴 ROE has fallen from 27.7% to 20.2% over 3 years (-7.5 pts).

🔴 ROCE has fallen from 30.8% to 23.7% over 3 years (-7.1 pts).

🟢 Free Cash Flow has turned positive, from -₹222 Cr to ₹176 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,016 Cr

Total Liabilities

₹570 Cr

Total Debt

—

Cash & Equivalents

₹24 Cr

Operating Cash Flow

₹218 Cr

Capex

-₹42 Cr

Shareholding (proxy)

Institutional Holding

6.8%

Insider Holding

62.2%

Corporate Actions

Dividend Rate

₹12

Ex-Dividend Date

10 Jul 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

2 positive2 mixed1 negative1 general

Don't Buy VST Industries Limited (NSE:VSTIND) For Its Next Dividend Without Doing These Checks

Simply Wall Street, 06 JulCapital return

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

VST Industries shares slide 4% after Q1 profit drops 25%, revenue falls 13%

The Economic Times, 29 JulResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

VST Industries shareholders approve ₹12 dividend, reappoint Sethi

scanx.trade, 29 JulCapital return

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

VST Industries Share Price Target 2026: Rs 315 Analyst Forecast

Univest, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

ITC, Godfrey Phillips, VST: What analysts expect from cigarette stocks in Q2 after new tax regime | Best stock to buy?

Livemint, 05 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Volume buzzers: VST Industries, MMTC, Nava, SCI, SPML zoom up to 20%

Business Standard, 17 Apr

Watch Items

Revenue growth is negative (-13.9%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

MiddlingRisk

WeakGrowth

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. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑