Shares of this multibagger tobacco stock jumped approximately 4 percent in Friday’s trading session after the company signed a supply agreement with “Ferrero India Private Limited”. In the last six months, the company’s stock gained more than 60 percent for its holders.
With a market capitalization of Rs 17,701.07 crores, the stocks of Godfrey Phillips India Limited started their trading session on Friday at Rs 3,303.30 and currently trade at Rs 3,413, gaining approximately 4 percent compared to the previous closing level of Rs 3,289.95 apiece.
Such bullish share price movements were observed today after the company, through a recent regulatory filing with the Bombay Stock Exchange (BSE), intimated that it has signed a ‘Product Supply Agreement” with Ferrero India Private Limited for distribution of some of the sweet-packaged food products manufactured by the latter through select channels.
As per the agreement, Godfrey Phillips will purchase the products from Ferrero and then distribute the same using its distribution set-up. The initial term of the Agreement is decided to be two years and is subject to customary terms and conditions including indemnities and warranties as set out in the Agreement.
The abovementioned agreement will enable Godfrey Phillips India to leverage its distribution set-up to distribute the products of Ferrero and thereby add to its prime financials in the coming quarters.
Ferrero India Private Limited is part of the “Ferrero Group” from Italy which is one of the world’s largest sweet-packaged food companies, with more than 30 brands sold in over 170 countries
During the recent financial quarters, the company’s prime business parameters, viz, its operating revenues as well as after-tax profits reported a decent jump in numbers with the former rising from Rs 1,158 crores during Q2FY24 to Rs 1,250 crores during Q3FY24, and the latter, keeping the timeframe the same, increasing marginally from Rs 202 crores to Rs 212 crores.
Keeping a purview of the last year, the company’s stock has proven to deliver multibagger returns of approximately 102 percent to its shareholders, i.e., if someone had invested Rs 1 lakh into the company’s stock a year ago, it would have converted to Rs 2.02 lakhs.
Godfrey Phillips India Limited is a cigarette manufacturer selling its products globally under brand names including Marlboro, Four Square, Cavanders, and Red & White among others, and has a license to sell the same in India. The majority of sales of Godfrey Phillips are generated from domestic operations within India.
Written by Amit Madnani
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