Godfrey Phillips reported disappointing set of numbers for the quarter. The revenue (net of excise duty) declined by 37.6% yoy to Rs543.3cr. Though the gross margin improved on account of price hikes and expected product mix, it was partially offset by increase in other expenses as percent of net sales. EBITDA declined by 30.5% yoy to Rs70.6cr and EBITDA margin expanded by 132bps yoy to 13%. PAT for the quarter was down by 22.8% yoy to Rs43.1cr.
Cigarette sales (net of excise duty, assuming all excise duty was towards cigarette sales) declined by 39.2% yoy. However, the EBIT margin improved by 300bps yoy.
The tea division reported sales decline of 23.2% yoy. The loss for the segment widened to Rs18.6cr against loss of Rs10.7cr.
Gross margin for the quarter improved by 16pp. We believe this was primarily led by price hikes post GST rate revision on cigarettes and favourable product mix.
Advertisement cost for the quarter was up by 160bps of net sales to 5.6%.
Other income for the quarter was Rs14.7cr against Rs5.7cr in Q4FY17.
Tax rate for the quarter stood at 29.2% against 33.2% during same quarter last year.
Company recommended a dividend of 400% i.e. Rs8 per equity share FY18.
Godfrey Phillips India Ltd ended at Rs. 754, down by 43.75 points or 5.48% from its previous closing of Rs. 797.75 on the BSE.
The scrip opened at Rs. 796.65 and touched a high and low of Rs. 823.65 and Rs. 739.95 respectively. A total of 10,23,409 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.
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