Best Tobacco Stocks in India for 2022 – Trading Fuel

  • Tobacco stocks are considered to be sin stocks.
  • A “sin stock” is a share in companies that are involved in activities that are considered unethical, like alcohol, gambling, tobacco, adult entertainment, or weapons.
  • Even after high criticism, sin stocks have attracted abundant investment.
  • In this blog, we will look at the best tobacco stocks in India.

An overview of the tobacco industry:

  • Tobacco is considered to be one of the most important crops in India.
  • The Portuguese introduced it to the country in the 17th century.
  • As per the statistics, there are more than 267 million tobacco users in the country.
  • India is the second largest producer of tobacco after China.
  • In India, there are currently 28.6% of the adult population (+15 years) who are consuming tobacco products and over 8.5% of the population under 15 years who are consuming tobacco.
  • Hence, this makes tobacco a very important crop in the country, and, over and above, it is very easy to grow as well as economical.
  • India is the second largest exporter of tobacco in the world after Brazil.
  • For the year 2021, total exports of the same were $923.8 million.
  • Nowadays, the industry is facing a lot of problems.
  • The industry is facing a lot of roadblocks, and its products also come with a lethal health warning.
  • As per the reports, tobacco-related deaths are up to 3 times higher than any other product.
  • In addition to this, the government has also reduced the possible consumption of tobacco products by heavily taxing the same products.
  • Due to this, the companies are now planning to enter into the other business segment.
  • These companies are now planning to invest in producing nicotine products that don’t come with health risks.

Best Tobacco Stocks in India for 2022

The following are considered to be the best tobacco stocks in India for 2022:

Sr. No.Stock Name
1Indian Tobacco Company (ITC)
2VST Industries Limited
3Godfrey Phillips India Limited
4Golden Tobacco Limited
5NTC Industries Limited

Also Like: Top 10 Best FMCG Stocks in India

#1. Indian Tobacco Company (ITC):

  • ITC was founded in 1910 and is the biggest player in the Indian tobacco industry.
  • ITC is partly owned by British American Tobacco and has dominated with a holding of 79% of the total sales volume.

The major cigarettes and cigars owned by the company are as follows:

The major cigarettes and cigars owned by the company
  • Today, in 2022, ITC is not just a tobacco company anymore.
  • The company is now involved in over 13 businesses across 5 segments.

The 5 segments include:

The 5 segments include
  • The debt-equity ratio of the company stands at 0, which seems to be a very good sign.
  • The company also has a good dividend payout of 93% and a dividend yield of 3.79%.
Stock Price307.50
52-week high308.80
52-week low204.35
Net Profit15,057.83
Basic EPS12.22

Also Read: Top 10 Best Monopoly Stocks in India

#2. VST Industries Limited:

  • The company was founded in 1930 and is headquartered in Hyderabad.
  • British American Tobacco (BAT) is a wholly owned subsidiary of VST Industries, which is wholly owned by British American Tobacco (VST).

The main brands of the company include the following:

The main brands of the company
  • They are also known as the last Nizams of Hyderabad as they used to smoke the company’s best Charminar cigarettes.
  • The company has zero debt and has a dividend yield of 4.40%.
  • The company has also achieved a 3-year profit CAGR of 12.18%.
Stock Price3305.05
52-week high3895
52-week low2794
Net Profit320.23
Basic EPS207.38

#3. Godfrey Phillips India Limited:

  • The company was founded in 1936 and was originally based out of London in 1844.
  • In the year 1968, international giant Philio Morris took over the company.
  • After this takeover, the company could then globally sell the renowned brand Marlboro.
  • Today, the company is considered the flagship company of the Modi Enterprise Group.
  • The company is currently producing a variety of cigarettes, cigars, as well as smoking tobacco.

In addition to this, the company has a business interest in the following segments:

  • The company has also achieved a 3-year profit CAGR of 33.26%.
  • The company has a debt-equity ratio of 0.12.
Stock Price1185.60
52-week high                                  1408.75
52-week low933
Net Profit431.97
Basic EPS83.08

#4. Golden Tobacco Limited:

  • The company was founded in 1930 and is now renowned as the leader in the tobacco sector.
  • The company has engaged itself in manufacturing, purchasing, selling, processing, and marketing tobacco and other tobacco-related products in India.
  • The company belongs to the Consumer Defensive sector and is then categorized as a tobacco company.

Also Read: List of 1328 NSE Listed Companies

The main products of the company are as follows:

The main products of the company

The net profit margin of the company is 18.29%.

Stock Price83.80
52-week high                                  190.80
52-week low69.20
Net Profit7.64
Basic EPS4.35

#5. NTC Industries Limited:

  • The company was set up in 1991 and is now a reputed player in the tobacco industry.
  • The company is said to have a good history of supplying flavored as well as quality tobacco products worldwide.
  • The company tends to create perfectly blended cigarette products in a wide range of flavors and fragrances after combining technology and all the high-quality ingredients.
  • As the tobacco industry is facing limitations, the company has started manufacturing agarbatti as well as matchboxes.

The main products and services of the company are as follows:

The main products and services of the company
  • This stock is also among the few that caught a speedy upswing in the market price.
  • By the end of August 2021, the stock price generated a return of around 719.80% after a lifetime low in 2020.
Stock Price82.20
52-week high                                  194
52-week low66.25
Net Profit4.44
Basic EPS3.72

Must Know: Top 10 Highest Market Capitalization Companies in India

How to invest in the tobacco sector’s stocks?

To invest in the stocks of the tobacco sector, you will need to follow just a few easy steps.

They are as follows:

Research work

Later, you can simply execute the investment and kickstart your investment in the tobacco stock.

Conclusion:

The above blog entirely consists of stocks that are from the tobacco sector.

Frequently Asked Questions (FAQs)

Answer: The top 5 tobacco companies in the country are: ITC Limited, VST Industries Limited, Godfrey Phillips India Limited, Golden Tobacco Company Limited, and NTC Industries Limited.
Answer: The FDA's center for tobacco products is regulating the manufacturing, marketing, and distribution of tobacco products to protect the health as well as the interests of the public.
Answer: The tobacco industry was valued at $849.90 billion in 2021 and is also expected to expand at a compounded annual growth rate (CAGR) of 2.4% from 2022 to 2030.
Answer: Nearly 202.9 billion units of tobacco are sold every year.
Answer: Deforestation of tobacco has many serious environmental consequences, such as loss of biodiversity, degradation, soil erosion, water pollution, as well as an increase in the level of carbon dioxide in the atmosphere.
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Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.