According to the Tobacco Institute of India, India is the world’s second-largest producer of tobacco, with an annual production of approximately 800 million kg. The tobacco industry significantly contributes to the economy, generating over ₹72,000 crores in tax revenue annually. Despite legal cigarettes accounting for only 9% of consumption, they remain a crucial revenue source for the government.
VST Industries Ltd has a market capitalization of Rs 7,484.93 crore, the shares were trading at Rs 440.65 per share, increasing around 0.42 percent as compared to the previous closing price of Rs 442.50 apiece.
Highlights:-
As of June 2024, Ace Investor Radhakishan S Damani holds 5.35 lakh equity shares which are equivalent to 3.47 percent of the company, however, on September 20 he sold 100,000 equity shares at an average price of Rs 439.05 per share which is valued at Rs 4.39 crores.
Moreover, between July and September 2024, Damani reduced his stake in VST Industries, selling 2.26% for approximately Rs 142 crore in July. On September 9, 2024, he offloaded 1.73 lakh shares at Rs 442.98 each, and on September 17, 2024, sold another 1 lakh shares at Rs 439.19, totaling Rs 4.39 crore.
Examining the company’s financial condition, revenue ramped up by 4 percent from Rs 333 crore in Q1FY24 to Rs 321 crore in Q1FY25, during the same time frame net profit plummeted significantly by 35 percent from Rs 84 crore to Rs 54 crore.
Recent events:-
Recently, VST Industries announced a 10:1 bonus share issue, marking its first such initiative. This move is expected to attract investor interest and improve liquidity in the stock. The company has consistently maintained a high dividend payout ratio, with expectations of continuing this trend in the future.
Ratio analysis & facility:-
Vst Industries operates with 2 factories and 6 regional offices. It consumes 4,955 tonnes of tobacco as raw materials, also in FY23, the company invested Rs. 76 crore(0.45% of its Gross Turnover) in R & D.
The company’s profitability measures show a decline in return on equity (RoE) from 27.71 percent in FY 22-23 to 24.07 percent in FY 23-24, while, during the same period return on capital employed (RoCE) declined from 35.70 percent to 30.97 percent. In contrast, the net profit margin (NPM) was 21.23 percent in fiscal year 23-24.
Company Snapshot:-
VST Industries Limited is an India-based company, which is engaged in the manufacturing and trading of cigarettes containing tobacco and unmanufactured tobacco products. The Company operates through the Tobacco and related products segment. The Company’s brands include Total, Editions, Charms, Special, Moments, Total Active Mint and Total Royal Twist.
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