According to the latest financial results reported by Business Standard, VST Industries Ltd reported a 24.42% year-on-year decline in standalone net profit for the first quarter of FY27. The company's net profit fell to ₹42.42 crore in the quarter ended June 2026, compared to ₹56.13 crore in the corresponding quarter of the previous year. Revenue from operations (excluding excise duty) also declined 13.91% to ₹256.46 crore from ₹296 crore in Q1 FY26. As per Business Standard, the subdued quarterly performance was primarily impacted by an extraordinary increase in taxes on cigarettes, with shares declining 3.06% to ₹221.80 during Wednesday's trading session.
As reported by Business Standard, operating performance weakened significantly during the quarter. EBITDA declined 35.06% year-on-year to ₹50 crore from ₹77 crore a year ago, while EBITDA margin contracted to 19.5% compared with 26% in the same quarter last year. This represents a more severe margin compression than previously reported, indicating the broader impact of higher tax burdens on the company's operations. PBT (Profit Before Tax) declined 23% to ₹58.28 crore from ₹75.99 crore in the previous year, indicating the broad-based impact of the tax changes across all profitability metrics. Total expenses (including excise duty) increased sharply to ₹823.21 crore in Q1 FY27 from ₹348.94 crore in Q1 FY26, primarily due to the higher GST and excise duty following the tax changes effective February 1, 2026.
According to the company's statement reported by CNBC TV18, with effect from February 1, 2026, the Government of India reduced the Compensation Cess on cigarettes to nil while significantly increasing GST and excise duty on the product. The company stated that these changes resulted in the overall tax incidence on cigarettes increasing by about 50% on average. The latest financial data confirms this tax burden continues to impact the company's operational efficiency and profitability, with the company citing higher tax incidence as a key drag factor on performance.
As reported by Business Standard, Managing Director Piyush Srivastava commented on the challenging environment ahead. He stated that given the extraordinary tax increases, a challenging year awaits the company. The management is adopting a measured pricing approach across brands to protect the consumer base, while acknowledging that growth of illicit trade remains a significant threat to the industry. In the unmanufactured tobacco business, ongoing geopolitical instability in the Middle East continues to weigh on growth. The company remains focused on recovering volumes by strengthening its brand portfolio and disciplined in-market execution. As per Business Standard, the company remains steadfast in its commitment to creating superior value for consumers and stakeholders despite the challenging operating environment.
According to Business Standard, shares of VST Industries Ltd ended 3.06% lower at ₹221.80 on Wednesday, reflecting investor concerns about the impact of higher cigarette taxes on the company's profitability and growth prospects. The stock decline follows the company's weak quarterly earnings announcement. The June 2026 quarter shareholding data showed mixed institutional activity, with Foreign Institutional Investors (FIIs) increasing their stake to 1.79% from 1.34% in the previous quarter, indicating selective buying despite the challenging performance. Meanwhile, Mutual Funds trimmed their holdings to 4.44% from 5.04%, showing reduced institutional confidence in the near term. Cost of materials consumed stood at ₹122.79 crore (down 15.68% YoY), while employee benefits expense increased 5.91% YoY to ₹35.79 crore during the period under review.
