Puff of Growth: What's Ahead for India's Tobacco Giants Part 1

Market Overview & Growth Expectations Revenue growth in cigarettes segment is expected to remain steady at 6–8% YoY in FY25, driven by stable taxation, volume recovery post-COVID, and premiumisation. Source: ICICI Securities Tobacco consumption is holding stable despite regulatory pressures, especially in premium and mid-tier categories, supporting profitability and cash flows for companies like ITC. Source: HDFC Securities Illicit cigarette trade has slightly reduced due to stable tax regime, helping organized players regain market share and improve volume growth. Source: Business Standard Key Companies Performance Outlook ITC, the largest listed tobacco company, is expected to maintain EBITDA margins of 35–37% in FY25, supported by strong pricing power and operating leverage. Source: Motilal Oswal VST Industries and Godfrey Phillips are expected to show mid-single-digit earnings growth, backed by stable rural demand and efficient cost structures. Source: Kotak Institutional Equities