The problem for tobacco companies is that the American cigarette market is shrinking faster than anyone expected. (Image: Pixabay)AI Quick ReadShares of Radhakishan Damani-backed VST Industries rallied a whopping 19% in trade on Friday, 17 April, after the company posted a sharp growth in its quarterly performance a day ago, even as the January-March period was marked by a sharp increase in taxes and a subsequent hike in cigarette prices.
Following the Q4 results announcement a day ago, VST Industries share price jumped 18.54% to ₹286.40 on the BSE. It had closed at ₹241.60 apiece in the last session.
The cigarettes and tobacco products maker is also part of ace investor Radhakrishna Damani's stock portfolio, who held a 29.1% stake in the company as of the March quarter of 2026.
VST Industries' Q4 profit in the recently concluded financial year came in at ₹116.7 crore as against ₹53 crore in the same period a year ago, marking a sharp 118.86% year-on-year (YoY) increase in the company's bottomline.
Meanwhile, the revenue from operations jumped 52% YoY to ₹689 crore, led by a sharp growth of 87% in the cigarette segment to ₹631 crore in Q4FY26 from ₹337 crore in the same period last year.
Margins also remained healthy at 30.3%, recording an increase of 1500 bps.
For the full financial year, too, the company maintained a strong performance as its profit after tax but before exceptional gains rose by 43.6% YoY to ₹292.3 crore. Meanwhile, the revenue rose to ₹2,042 crore from ₹1,806 crore on a YoY basis.
Cigarette volumes remained healthy for the quarter and FY26 despite the excise duty hike and GST implementation of 40%. In Q4FY26, cigarette volume was at 667 million as against 647 million.
Companies raised cigarette prices by a minimum of ₹22 to 25 per pack of 10 sticks to as much as ₹55 after the government imposed an additional excise duty on cigarettes and tobacco products over and above the highest 40% GST slab rate, effective February 1. The excise duty hike is in the range of ₹2,050-8,500 per thousand sticks based on the length and type of the product.
Commenting on the performance of the company, Piyush Srivastava, Managing Director, said, “We achieved robust volume recovery supported by our enhanced brand portfolio and disciplined in-market execution. While geopolitical instability in the Middle East continues to weigh on our unmanufactured tobacco business, our productivity initiatives have delivered strong double-digit profit growth. Given the extraordinary tax increases, a challenging year awaits us. We will remain focused on strengthening our brand portfolio and in-market execution. We remain steadfast in our commitment to creating superior value for consumers and stakeholders."
The company's board also recommended a final dividend of ₹12 per equity share of ₹10 each. The record date for the said dividend has been fixed as 10 July, 2026. The dividend will be paid within 30 days of the approval of the shareholders at the ensuing 95th Annual General Meeting.
Shares of VST Industries have displayed a mixed price performance, with a strong near-term show but a long-term weakness. In 2026 so far, Damani-owned stock is up 8% and has seen a 27% rise in a month. However, it has lost 6% in a year, 18% in two years and 8% in three years.
Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.
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