VST Industries reported a significant decline in its financial performance for the June quarter, with net revenue dropping 13% year-on-year to Rs 256 crore and net profit falling 25% to Rs 42 crore. The company's performance was adversely affected by increased taxes on cigarettes, which impacted profitability.
The company's operating performance also weakened, with EBITDA declining 35% year-on-year to Rs 50 crore, leading to a contraction in the EBITDA margin to 19.5% from 26% a year ago. The tax changes, effective February 1, 2026, saw the Government of India reduce the Compensation Cess on cigarettes to nil while significantly increasing GST and Excise Duty, raising the overall tax incidence by around 50%.
VST Industries' stock has been under pressure, falling 12% over the past three months and nearly 19% over the last year. The stock's technical indicators show weakness, with a 14-day RSI of 32.2 and trading below all key simple moving averages.
“Given the extraordinary tax increases, a challenging year awaits us. We are adopting a measured pricing approach across our brands to help protect our consumer base.”
Piyush Srivastava, Managing Director of VST Industries
The June 2026 quarter shareholding data revealed mixed institutional activity, with Foreign Institutional Investors increasing their stake to 1.79%, while Mutual Funds reduced their holdings to 4.44%.
"Given the extraordinary tax increases, a challenging year awaits us. We are adopting a measured pricing approach across our brands to help protect our consumer base," said Piyush Srivastava, Managing Director of VST Industries.
Background
The cigarette industry has been grappling with regulatory changes and increased taxation, which have affected demand and profitability. The rise in illicit trade also poses a significant threat to the industry's stability.
Looking ahead, VST Industries is focused on recovering volumes by strengthening its brand portfolio and disciplined in-market execution. The company remains committed to creating superior value for consumers and stakeholders despite the challenging environment.
