Best Tobacco Shares in India (2024)

Here is a list of the top tobacco companies listed on NSE:

Tobacco Stocks	Market Cap (₹ cr.)	PE Ratio
Godfrey Phillips India Ltd	22,220	25.24
VST Industries Ltd	6,250	20.79
Golden Tobacco Ltd	81.06	9.94
Sinnar Bidi Udyog Ltd	20.47	171.14
NTC Industries Ltd	164.11	32.41

 

Advantages of Investing in the Top Tobacco Stocks in India

Besides yielding high returns, tobacco stocks provide investors with many benefits:

• Stable Demand in Developing Markets: The use of tobacco is still uncontrolled, thereby preserving a market for Best tobacco stocks in India.
• Strong Brand Loyalty: Tobacco firms, thus, most of the time, have well-established brands and consumer loyalty, which may lead to steady revenues.
• Stable Cash Flows: Tobacco firms often have consistent and predictable cash flows due to inelastic demand for their goods. This steadiness may be appealing to investors searching for consistent payouts.

 

Risks of Investing in Tobacco Shares in India

Besides all the benefits, the tobacco industry is still exposed to social and health implications. Here are the top risks associated with tobacco stock investment:

• Health-related Litigation: Lawsuits against tobacco firms entail financial costs through compensations and fines.
• Regulatory Risks: Higher tariffs and taxes or new restrictions on tobacco products may endanger business profitability and the right to access certain markets.

 

Overview of the Best Tobacco Shares in India

Before investing in tobacco stocks, explore this overview of the best tobacco company stocks.

 

ITC Ltd

ITC was established in 1910 as the Imperial Tobacco Company. Its operations at the time were limited to the production of cigarettes and many other tobacco products. Today ITC is the leading cigarette manufacturer in India offering brands such as Insignia, India Kings, Classic, Gold Flake and others.

 

Godfrey Phillips India Limited

Godfrey Phillips India Limited, a Modi Enterprises company, was established in 1936 and is one of the largest FMCG companies in India. The company is associated with cigarette brands like Four Square, Red and White, Cavanders, Tipper, and North Pole. Furthermore, it has a license agreement with Philip Morris for the production and distribution of this special brand known as Marlboro.

 

VST Industries Limited

VST Industries Limited, formerly Vazir Sultan Tobacco Company Limited, was formed on November 10, 1930. It was renamed on April 30, April 30, 1983. It was established in Hyderabad and is into the manufacturing and selling of cigarettes and tobacco products.

 

NTC Industries Ltd

NTC Industries Ltd is one of India's oldest cigarette and smoking mixtures manufacturers, originally based in Kolkata. This is a well-established brand that operates in the domestic and export markets.

 

Indian Wood Products Company

The Indian Wood Products Company Limited is a company that was founded in 1919. The company is mainly involved in the production, processing, and sale of high-quality Katha (Catechu) and Cutch.

 

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Consider These Factors Before Investing in Tobacco Stocks India

Investing in tobacco stocks has ethical concerns and health dangers. To make educated selections, consider these factors:

• Government Regulations: The governments are setting measures in making cigarette products. Research how these changes might influence the sector and any possible influences on the returns.
• Financial Health: To monitor the company’s stability, it is necessary to pay attention to the company’s financial results, such as quarterly reports, sales and profits, credit limits, and cash reserves.
• Ethical Factor: Because of the health risks associated with tobacco smoking, most investors avoid investing in the tobacco sector regardless of the opportunities in the sector.
• Market Demand: Cigarette smoking is declining at an alarming rate in many countries. Thus, you should consider the market need for tobacco products and how this market influences the company’s revenues.
• Competition: The cigarette industry has to deal with strong competition from other domestic and global industries as well. This proves that before investing, you have to consider the market share and long-term prospects of the best tobacco stocks.

When you start investing in tobacco stocks in India, it can be confusing to understand how to use a demat account to make informed decisions. However, by considering several important factors, you can make better investment choices over time.

 

Conclusion

India is the 2nd largest producer and consumer of tobacco products in the world, and the tobacco industry is highly lucrative. However, it is in your best interest to do your own research and consult a financial advisor before participating in Best Tobacco Stocks in India.

Start your investment journey with Almondz Trade by opening a free Demat account. This single account allows you to invest in IPOs, stocks, options, funds, currencies, and more.

Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Kindly consult an expert before making any related decisions.