VST Industries Reports Q1 FY27 Results: Net Revenue Declines 13% Amid Sharp Increase in Tax Incidence
VST Industries Limited, an established player in cigarette manufacture and distribution with over nine decades of experience, released its financial results for the quarter ended June 30, 2026. The company reported underwhelming performance, citing an extraordinary increase in taxation as a key factor impacting profitability.The firm announced that Net Revenue fell by 13% at Rs. 256 crores, compared to Rs. 296 crores in the previous year. Profit after Tax (PAT) saw a decline of 25%, recording Rs. 42 crores against Rs. 56 crore.
The financial results provide a snapshot across three quarters:
| Particulars (Rs. Crore) | Q1 FY27 | Q1 FY26 | Q4 FY26 | QoQ (%) |
|---|---|---|---|---|
| Cigarette Volume (average per month in mn) | 611 | 714 | 667 | -14.4 |
| Revenue from Operations: | ||||
| Cigarette (net of excise duty) | 216 | 255 | 399 | -15.3 |
| Unmanufactured Tobacco | 40 | 41 | 58 | |
| Net Revenue | 256 | 296 | 457 | -13.5 |
| EBITDA | 50 | 77 | 208 | -35.0 |
| EBITDA Margin (%) | 19.5 | 26.0 | 45.5 | -650bps |
| Profit after Tax | 42.4 | 56.1 | 116.7 | -24.4 |
The shift in the tax structure was noted as a significant factor in this performance decline. The company stated that effective from February 1, 2026, the Government of India reduced the levy of Compensation Cess on cigarettes to 'Nil'. Concurrently, GST and Excise Duty on the product increased significantly, resulting in an average increase of about 50% in the tax incidence on cigarettes.
Piyush Srivastava, Managing Director of VST Industries, commented on the results, acknowledging the challenging environment created by the extraordinary tax increases. He stated that the company is pursuing a measured pricing approach across its brands to safeguard its consumer base.
Srivastava added that growth related to illicit trade remains a considerable threat to the industry. The firm is focusing efforts on strengthening its brand portfolio and executing disciplinedly in the market to recover volumes. Regarding the unmanufactured tobacco business, he noted that geopolitical instability in the Middle East continues to negatively impact growth, maintaining commitment to creating superior value for stakeholders.
VST Industries Limited was incorporated in 1930 as The Vazir Sultan Tobacco Company Limited and is a leading entity in cigarette and tobacco leaf manufacturing and distribution. Its products reach over 10 lakh retail outlets across India, achieving an estimated market penetration exceeding 80%. Two of the company's brands, Total and Editions, are among the Top 10 cigarette brands nationally. The company currently indents more than 20,000 tonnes of tobacco and interacts with over 15,000 farmers.
VSTIND Stock Price Movement
VST Industries Limited's shares today slipped by 1.64% to settle at ₹229.25, closing down ₹3.85 from the previous day's close. The stock finished the post-market session with a traded volume of 229,911 shares, landing within the intraday range set between ₹228 and ₹233.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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