Stock Market in stillness ‘chews & puffs tobacco’
Image credit X.com @lorelopezipm
Godfrey Phillips shines in dull session in stock market
By S Jha
New Delhi, August 19: Sensex almost ended flat on Monday. Nifty also exhibited elephantine urge to rest. The stock market lacked momentum in the absence of firm cues.
Indian tobacco industry is thriving of late. Export of tobacco product is steadily rising. India aims to cut down the tobacco consumption by 2025 by 30 per cent.
The World Health Organisation, however, portrays a grim picture of tobacco consumption in India. “India’s Global Youth Tobacco Survey 2019 found that the prevalence of tobacco among school going children aged between 13-15 years was 8.4 per cent. Disconcertingly, the survey findings show that even before celebrating their seventh birthday, 11.4 per cent children start smoking cigarettes, 17.2 per cent starting smoking bidi and 24 per cent start using smokeless tobacco products like gutkha, khaini, zarda,” said the WHO in a report early this year.
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The stock market is mirroring the thriving businesses of tobacco. Godfrey Phillips India shares were locked in 20 per cent upper circuit on Monday.
“In comparison to the Sensex, Godfrey Phillips India has shown a remarkable 123.87 per cent growth in the past year, while the Sensex has only grown by 23.83 per cent,” said Marketsmojo in a report on the performance of the tobacco-manufacturer.
Godfrey Phillips India commands 10 per cent share in the cigarette market in India. The market leader is ITC with 70 per cent share.
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The ITC share price has been trending for the past few weeks. Experts claim that the cigarette manufactures find innovative ways to attract new users.
Against $822.23 million worth of export of unmanufactured tobacco in FY 2023, India collected $1052 million in FY 24 from the exports of unmanufactured tobacco. Export of manufactured tobacco is also steadily rising, from $391.15 million in FY23 to $398 million in FY24.
Besides, the association of tobacco growers continue to lobby against “import of tobacco products”. The association through media blitzkrieg claims that illegal tobacco products are being dumped in India from the east Asian countries.
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VST has also given over 21 per cent returns this year. This company has a tiny share in the tobacco market in India dominated by ITC and Godfrey Phillips.
Disclaimer: This article makes no recommendation for buy/sell of shares of any company.
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