The company, for Q3FY16 posted a very muted set of numbers. Net profit was stagnant at Rs.2653 crore v/s Rs.2635 crore in previous Q3. This was on a net sales of Rs.9103 crore, up 3%. Today, 44% of the company’s income comes from cigarette, its mainfray but its woes in terms of constant taxation from the Govt continues.

Over the last 3 ½ years, the incidence of Excise Duty and VAT on cigarettes, at a per unit level, has gone up cumulatively by 98% and 124% respectively which is exerting severe pressure on legal industry volumes even as illegal trade grows unabated. It is pertinent to note that steep increases in Excise Duty on cigarettes in recent years have resulted in widening the differential in Excise Duty rates (on a per kg. of tobacco basis) between cigarettes and other tobacco products from 29 times in 2005/06 to over 53 times currently.

And now there is talk of more tax on the industry. As we brace for the Budget, let us see if this sector’s worst fears come true.