Godfrey Phillips shares slip 5% on 24Seven retail business sale report

Godfrey Phillips stock falls: Shares of cigarette maker Godfrey Phillips fell as much as 4.81 per cent to hit an intraday low of Rs 6,291.60 per share on Wednesday, September 4, 2024.

However, at 1:22 PM, the share was trading 3.18 percent lower at Rs 6,399.30 per share. In comparison, the BSE Sensex was down 0.28 per cent at 82,327.03 levels.

The fall in Godfrey Phillips shares price came after media reports indicated that the company has finalised the sale of its retail business 24Seven.

According to media reports, Godfrey Phillips has signed a term sheet with the start-up New Shop, with plans to complete the transaction by September-end. The transition of 24Seven's shops and assets to New Shop is already underway.

In July, the Delhi High Court (HC) granted permission to Godfrey Phillips to proceed with the sale of its retail business.

Q1FY25 performance
 

Godfrey Phillips posted a 10.17 per cent drop in its consolidated net profit to Rs 228.6 crore for the June quarter of financial year 2025 (Q1FY25), as against a profit of Rs 254.4 crore in the June quarter of financial year 2024 (Q1FY24).

However, its revenue from operations rose 15.7 per cent year-on-year (Y-o-Y) to Rs 1,440.8 crore in the June quarter of FY25, from Rs 1,245.4 crore in the June quarter of FY24.

Meanwhile, total expenses of Godfrey Phillips in the June quarter surged 17.4 per cent annually to Rs 1,216.5 crore.

Godfrey Phillips India, a flagship company of the KK Modi Group, is a leading FMCG enterprise in India with a considerable 14 per cent market share in the domestic cigarette industry. 

Known for its iconic brands such as Four Square, Red & White, and Cavanders, the company has an exclusive sourcing and supply agreement with Philip Morris International, allowing it to manufacture and distribute Marlboro cigarettes in India. 

As of Q1FY25, the company's tobacco business dominated its operations, accounting for 93 per cent of its revenue compared to 84 per cent in FY20. The tobacco segment is divided into domestic business, which constitutes 70 per cent of the revenue and includes Marlboro cigarettes, and international business, contributing 23 per cent and involving the production of its own brands and contract-manufactured cigarettes for over 40 countries across Latin America, the Middle East, Southeast Asia, and Eastern Europe. 

The company's international brands include Originals, Jaisalmer, Stellar, and Black Jack. 

The remaining 7 per cent of the company's revenue comes from its non-tobacco business, which has decreased from 16 per cent in FY20. This segment includes confectionery and Ferrero products, with distribution rights for brands like Funda Goli, Imli Naturalz, Funda C, Funda Gum Shums, and a recent agreement with Ferrero India to distribute Tic Tac and Kinder Joy.