VST Inds

A higher excise duty outgo, increased cost of raw materials, a 24% surge in operating costs, a 74% drop in other income pushed down the net profit of the company to Rs.41 crore, down 21% (YoY) and this was despite a 15% rise in net sales at Rs.218 crore.

The company’s excise duty payment has shot up 37% (YoY)  at Rs.258 crore, which was 54% of the gross sales . Raw material cost rose 35% EBITDA for the quarter was at Rs.65 crore, up 1.5%.  Margins have dropped to 29.82% v/s 33.86% in previous Q4. The company ended FY15 with a 1.3% rise in net profit at Rs.152 crore.

This is the third largest cigarette making company in India, next to ITC and Godfrey Philips. This company was founded way back in 1930 as Vazir Sultan Tobacco. It is an affiliate of British American Tobacco (BAT), UK, one of the largest cigarette manufacturers in the world, and holds 32.16% stake. It operates mainly in the lower-end category of the industry, with brands like Charms, Charminar, Moments and Special Extra Filter. It also exports leaf tobacco to cigarettes manufacturers across the globe. The company has been debt-free since FY05 and has been able to finance all the growth through internal accruals.