Modi Enterprises' cigarette manufacturing arm faced squeezed margins due to steep tax hikes implemented in the fourth quarter of FY26. While operational revenue doubled, total expenses surged concurrently to Rs 4,027.39 crore, pulling net earnings down. To defend against illicit market competition and protect sales volumes, the business adopted a calibrated pricing strategy. The broader momentum remained visible over the longer horizon, with total consolidated income for the first half of FY27 doubling to Rs 8,139.64 crore.
Key points
Sharad Aggarwal noted that heavy fiscal tax burdens have dampened overall profitability w…: Sharad Aggarwal noted that heavy fiscal tax burdens have dampened overall profitability while accelerating the expansion of illicit trade.
Management has enacted a calibrated pricing framework to mitigate pressures on sales volu…: Management has enacted a calibrated pricing framework to mitigate pressures on sales volumes across its major brand portfolio.
Consolidated income across the first six months of FY27 expanded twofold to achieve Rs 8,…: Consolidated income across the first six months of FY27 expanded twofold to achieve Rs 8,139.64 crore.
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The company had logged a net profit of Rs 304.99 crore during the July-September period a year ago, according to a regulatory filing from Godfrey Phillips India, the flagship company of Modi Enterprises.
Revenue from operations was twofold at Rs 4,198.17 crore in September quarter FY27.
"Due to the steep tax increase implemented in Q4 of FY26, the profitability has declined by 41 per cent compared to the corresponding period last year," CEO Sharad Aggarwal said in the earnings statement.
Total expenses were up twofold at Rs 4,027.39 crore. Total income, which includes other income, too doubled to Rs 4,241.81 crore.
"The higher tax burden has not only impacted industry profitability but also contributed to the growth of illicit trade, which remains a significant concern for the legal cigarette industry," he said.
In response, Godfrey Phillips India has adopted a calibrated pricing strategy in order to contain the impact on volumes.
In the first half of FY27, total consolidated income was also up twofold to Rs 8,139.64 crore.
Godfrey Phillips India is the flagship company of Modi Enterprises. It makes…
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