ITC, Godfrey Phillips and VST Industries are among the leaders in the tobacco and cigarette market. At present, ITC dominates the cigarette market in India, with a whopping 75% market share; however, Delhi-based Godfrey has outpaced its rivals in terms of sales for the past 3 years. The three companies have also performed significantly on the Indian stock market. What could an Rs 10,000 investment have grown into in these cigarette stocks in the long term?
Top Cigarette Companies:
ITC is the leader in the cigarette market of India, with an estimated 75% market share, followed by Godfrey Phillips which has a 10% market share. Not too far is VST Industries at the third position with 9% share. The other category holds 6% market share in the industry.
In terms of market capitalisation, ITC dominates with a m-cap of Rs 5,16,457.72 crore, while Godfrey's m-cap is around Rs 45,286.70 crore as of July 4, 2025. However, VST Industries' market cap is around Rs 4,914.08 crore.
Major Brands Of Top Cigarette Companies:
ITC: Gold Flake, Classic, Navy Cut, Scissors.
Godfrey Phillips: Marlboro, Four Square, Red & White
VST Industries: Charms, Charminar, Total & Special
Top Growing Cigarette Companies:
While ITC is the leader of the segment, however, it is Godfrey Phillips whose sales are higher. In the past 3 years, Godfrey's sales growth is about 20.5%, while ITC has 12.9% sales growth and VST's growth is about 5.9%, as per data on Screener.
But ITC has seen a modest volume growth, while Godfrey has seen strong volume growth in cigarettes in recent years.
"The continued strong growth in cigarette volumes may prompt a rethink in the taxation policy of the government. The government has opted for a low increase in tax on cigarettes in the past few years versus a much higher increase in tax on cigarettes before that," added analysts at Kotak Institutional Equities in a note.
"We would note that the current tax rate on cigarettes in India at around 53% is still lower than the WHO's recommended tax rate of 75% of the retail price. As such, tobacco will run the perpetual risk of an increase in tax rates, especially if cigarette consumption were to grow strongly in India," added the analysts.
Top Cigarette Stocks 5-Year Performance:
Godfrey has outperformed ITC and VST, with a more than 787% surge in 5 years on NSE. While ITC has given nearly 99% returns. But VST's 5-year performance has been broadly flat.
Data from Angel One revealed that Godfrey's 5-year CAGR is also stronger at 52.69%, while ITC and VST have 16.84% and 0.49% CAGR. Godfrey's return on capital employed is 30.30% and return on equity is at 22.66%. In terms of ROCE and ROE, ITC outperformed with 53.79% and 28.33%. Meanwhile, VST's ROCE and ROE are at 29.01% and 24.80%.
ROE considers profits generated on shareholders' equity, but ROCE is the primary measure of how efficiently a company utilises all available capital to generate additional profits, as per Investopedia.
What Could an Rs 10,000 Investment In These 3 Cigarette Companies On NSE Have Grown Into?
Note: The calculation is based on the 5-year performance of these top cigarette stocks on the NSE.
Should You Still Invest?
In 2025, the revenue in the Cigarettes market in India amounts to $14 billion, as per Statista. Looking ahead, it is expected that the volume in the Cigarettes market will reach 87.7 billion pieces by 2030, while the average volume per person in the Cigarettes market, is projected to amount to 71.4pieces in 2025. It is projected that the market will experience an annual growth rate of 4.22% (CAGR 2025-2030).
ITC Share Price:
The consensus recommendation from 37 analysts for ITC Ltd. is STRONG BUY, as per Trendlyne data. Of these, 23 analysts have recommended STRONG BUY and 12 analysts suggested BUY. The average target price on ITC is Rs 500.26, indicating 21.3% potential upside ahead.
Earlier, Motilal Oswal's note said, "Cigarette performance was quite healthy in FY25 (~7% growth) in the backdrop of stable taxes and consistent product innovation by the company. Cigarette volume is not only better compared to its FMCG business but also compared to several other FMCG companies. If ITC sustains mid-single digit volume growth in the cigarette and FMCG business sees recovery in FY26, we expect a valuation re-rating. We reiterate our BUY rating on ITC with an SoTP-based TP of INR525 (premised on 30x Mar'27E P/E)."
Apart from the cigarette business, ITC is one of India's foremost conglomerates with businesses spanning Fast Moving Consumer Goods (FMCG), Paperboards and Packaging, Agri Business and Information Technology.
Godfrey Phillips Share Price:
The company reported significant growth in net sales and operating profit, alongside impressive financial metrics, including a high return on equity and low debt-to-equity ratio, reinforcing its market leadership, as per MarketsMojo.
However, on Trendlyne, the consensus is of SELL by 1 analyst. The average target price is at Rs 5340, signalling nearly 39% potential downside. But, EPS is expected to grow by 38.8% in FY26.
Godfrey Phillips India Limited (GPIL), flagship company of Modi Enterprises, and one of the largest FMCG companies in India has been producing some of the most popular cigarette brands in the country. GPIL also manufactures and distributes iconic brand Marlboro under a license agreement with Philip Morris.
VST Industries Share Price:
The consensus recommendation from 1 analyst for VST Industries Ltd. is SELL, as per Trendlyne. However, EPS is expected to grow by 17.0% in FY26. The average target price is at Rs 327 apiece, indicating at nearly 13% potential upside.
VST has lagged in execution despite better market understanding. Adding Emkay Global's note said, "Our ground checks suggest that VST's focus is on the KSFT segment, with affordable offerings like Edition Trio/Edition Trio Double priced at Rs10/12, respectively."
The Company has a manufacturing facility at Hyderabad and Toopran (Telangana) and its principal activities are manufacture & sale of cigarettes and unmanufactured tobacco.
Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author, GoodReturns.In nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.
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