Godfrey Phillips Sees Single-Digit Rise In Volumes May This Financial Year

Godfrey Phillips India Ltd., the maker and distributor of Marlboro brand of cigarettes in the country, expects volumes to increase in single digits in the current financial year even as industry sales are likely to decline.

That’s according to KK Modi, president at Godfrey Phillips India. The company’s market share is expected to remain slightly above 12 percent, Modi told BloombergQuint in an interaction.

Here are the excerpts of the conversation:

On Cigarette Volumes:

• Marginal change in volumes.
• Industry-wide decline of 4 percent.
• Volumes may rise in single-digits in the current financial year.
• Company’s volume will be in-line with the industry.

On Volume Decline:

• Volumes declined not because consumers quit smoking, but due to the rise in sales of illicit cigarettes.
• Import of cigarettes without any duty payment have risen.
• Illicit cigarettes form one-fourth of the market.

On Market Share:

• Slight increase in the previous financial year.
• In the ongoing financial year, market share may remain flat but not decline.
• Sales operative only in 40 percent of the country.
• The company is looking to expand in southern India.

On Price Hike:

• Price hike to be in-line with the government’s tax decision.
• Industry will not hike prices if taxes remain stable.

Shares of the company have lost almost 37.4 percent so far this year compared with S&P BSE Sensex’s gains of 11.8 percent during the period.

Watch the full interaction here: