Shares of Godfrey Phillips Ltd. witnessed a sharp decline on Tuesday, February 23, falling 11.05% to ₹2,213.10 from the previous close of ₹2,487.80. According to latest market data, the stock had gained 31% over the previous three sessions before the current decline, with investors booking gains following the sharp rally. The stock had earlier snapped its three-day gaining streak on Friday, February 20, declining nearly 5% to hit an intraday low of ₹2,400 per share. As per The Economic Times, the cigarette maker eased to ₹2,400 even as peers raised prices following the excise duty hike.
Earlier this week, a CNBC Awaaz report indicated that cigarette manufacturers have implemented sharp price hikes to offset higher excise duties, leading to higher EBIT per stick. As reported by The Economic Times, Godfrey Phillips India had raised the price of Marlboro Compact to ₹11.5 per stick from the previous ₹9.5. This pricing strategy reflects the industry's response to increased regulatory costs. ITC is likely to raise cigarette prices by 20-40% across brands, with fresh shipments expected to reach the market soon, while retailers are also selling existing inventory at higher prices. The price hikes aim to reduce expected profit declines as companies adapt to the new tobacco tax regime.
The company reported exceptional quarterly results for Q3 FY26, with consolidated net profit rising 8.7% to ₹343.29 crore compared to ₹315.84 crore in the corresponding period last year, as reported by The Economic Times. Revenue from operations surged 15.68% to ₹2,189.93 crore during the December quarter, up from ₹1,893.08 crore in the previous fiscal year. The latest quarterly results show even stronger momentum, with the company witnessing QoQ revenue growth of 41.24%, which is the highest in the last 3 years. The total expenses of Godfrey Phillips grew 18% to ₹1,843.96 crore in the December quarter, reflecting the company's operational expansion during the period.
According to The Economic Times, the stock is currently trading below its 200-day simple moving average of ₹2,901.2 while holding on to the 50-day average (SMA) of ₹2,336. The stock has been a market underperformer, down 27% in the past six months, with price erosion reducing its 1-year gains to 9%, lower than Nifty's 11% returns in the same period. Despite recent gains, the stock still trails sector leaders and remains below its 200-day moving average, keeping traders cautious about the current price action. Recent technical indicators show a 50-day moving crossover that appeared yesterday, with an average price decline of -3.18% within 30 days of this signal in the last 5 years.
Consumer analyst Abneesh Roy from Nomura sees a real FMCG revival driven by GST cuts, steady rural demand, and recovering urban consumption, as reported by The Economic Times. He highlights Nestle, Britannia, Marico, and Tata Consumer as near-term beneficiaries, while positioning ITC as a one-to-two-year recovery play after a tax shock. The analyst notes that Hindustan Unilever's premium beauty investment is also a structural re-rating catalyst. These developments follow the government's notification ending the GST compensation cess and rolling out a new tobacco tax regime on February 1. The company's strong Q3 performance with 41.24% quarterly revenue growth positions it well for continued recovery in the tobacco sector.
