Godfrey Phillips India Ltd | Fundamental Analysis | CA Rachana Ranade
Published: 2023-09-01
Status:
Available
|
Analyzed
Published: 2023-09-01
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
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Topic
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Godfrey Phillips India Limited holds 12% of the organized cigarette market share in India, significantly trailing the market leader ITC which holds 78%.
"ITC has a market share of 78 percent in the organized cigarettes market space second highest is Godfrey Phillips India limited with 12 percent"
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Godfrey Phillips India Limited experienced a substantial 70% increase in sales of products outside India in FY23 compared to FY22.
"outside India Revenue has increased by 69.9 percent almost 70 percent increase in sales of products outside India."
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Godfrey Phillips India Limited saw a 24.7% growth in revenue within India in FY23 compared to FY22.
"overall we within India growth as compared to 22 it has grown by 24.7 percent"
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Cigarettes contribute 69.2% and unmanufactured tobacco contributes 19.2% to Godfrey Phillips India Limited's total revenue.
"69.2 percent of the total revenue is contributed only by cigarettes 19.2 percent is contributed by unmanufactured tobacco"
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The convenience stores segment, including 24X7 stores, contributes approximately 10% to Godfrey Phillips India Limited's total revenue.
"if you check out retail Goods if you remember the convenience stores that is contributing to roughly 10 percent"
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Godfrey Phillips India Limited's stock is trading at a Price-to-Earnings (PE) ratio of 13.1, which is cheaper than the industry average PE of 15.4.
"stock PE that is at 13.1% as compared to Industry P of 15.4 so definitely as compared to the industry average it is available at a cheaper price"
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Godfrey Phillips India Limited reported all-time high sales, operating profit, and PBT numbers in the latest reported quarter (June), showing good performance on both QoQ and YoY comparisons.
"the sales numbers the operating profit number the PBT numbers all are at an all-time high so be it QOQ comparison beat YOY comparison the numbers in this quarter look to be good"
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On a Trailing Twelve Months (TTM) basis, Godfrey Phillips India Limited has achieved all-time high sales, operating profit, and PBT, with PBT reaching 892 crores.
"here also you can see that overall the sales number is at an all-time high the operating profit number is also at an all-time high the PBT number is at 892 crores which is also at an all-time high"
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Profit growth for Godfrey Phillips India Limited has outpaced sales growth over the long term (15% vs. 5% over 10 years) and TTM (72% vs. 30%), which is considered a positive sign.
"the compounded profit growth 10 year for sales it was five percent but for profit it is 15% for TTM sales growth it is 30% and TTM profit growth is 72 percent so it's always a good sign if profit is able to beat the growth in profit is able to beat the growth in sales"
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Godfrey Phillips India Limited's stock price has shown a Compound Annual Growth Rate (CAGR) of 15% over the past 10 years and a significant 81% increase in the last year.
"stock price CAGR is also fair enough 10 years is at 15 percent one year it has risen quite nicely at 81 percent"
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Godfrey Phillips India Limited's operating cash flow has reached an all-time high of 736 crores.
"the operating cash flow is also at an all-time high at 736 crores"
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The weekly chart of Godfrey Phillips India Limited exhibits an 'up flag' pattern, with a specific section resembling a 'pennant'.
"you can see this is more like an up flag pattern that has been formed but only this part if you focus on this this is more like a pennant"
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Godfrey Phillips India Limited's stock price has increased by approximately 15% in the last month.
"if you have seen last one month it has gone up almost 15 percent"
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Godfrey Phillips India Limited faces a geographical concentration risk as over 90% of its revenue is generated from the northern and western regions of India.
"the company majorly operates in the northern and western parts of India and over 90 percent of this of their revenue is contributed from these regions so I can say there is a concentration risk for the company"
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Godfrey Phillips India Limited faces intense competition from larger players in the market, holding only a 12% market share.
"the second one even if it is GPIL it is just 12 percent of the total market share so the competition from the largest player for them is pretty much intense"
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Godfrey Phillips India Limited is exposed to regulatory risks, including potential increases in taxes on tobacco products and restrictions on advertising.
"so if you have seen the budget every single budget people expect that somewhere or the other the taxes for their products should increase so that is a risk and also there is a risk about the advertisement that these companies can do"
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India ranks as the second-largest tobacco producer globally, with an estimated annual production of 800 million kgs.
"India is the second largest producer of tobacco with an estimated annual production of around 800 million kgs."
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With only 0.24% of India's arable land dedicated to tobacco cultivation, there is significant scope for increased tobacco production.
"but if I were to understand the overall ariable land of India that is occupied by tobacco that is a meager 0.24 so is there more scope for production? Answer is yes."
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Over the past four decades, while overall tobacco consumption in India has risen by 50%, legal cigarette consumption has declined by 43%, and other forms of tobacco (chewing, illegal cigarettes) have increased by 75%.
"the total consumption over the last four decades has increased by almost 50 percent but the consumption of legal cigarettes has gone down by almost 43 percent whereas other forms of tobacco which include something like chewing tobacco or it will also include illegal cigarettes that has gone up by almost 75 percent"
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Tobacco products in India are heavily taxed, with GST at 28%, a GST compensation cess, excise duty, and National Calamity Contingency Duty (NCCD), resulting in taxes constituting over 50% of the Maximum Retail Price (MRP).
"it is a heavily taxed product with GST falling into the 28 percent category, an additional GST compensation saturated charged there is a basic excise duty in what that there is an NCCD involved which is like National Calamity Contingency Duty and because of all these taxes out of the total MRP more than 50 percent comprises of only the tax component"
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Godfrey Phillips India Limited's sales, operating profit, and PBT reached all-time highs in the June quarter.
"if you check out the quarterly results June results if you are seeing latest data available the sales numbers the operating profit number the PBT numbers all are at an all-time high"
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Godfrey Phillips India Limited's trailing twelve months (TTM) sales and operating profit are at all-time highs.
"if you check out the profit and loss that is on a TTM basis here also you can see that overall the sales number is at an all-time high the operating profit number is also at an all-time high"
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Godfrey Phillips India Limited's Profit Before Tax (PBT) has reached an all-time high of 892 crore INR.
"the PBT number is at 892 crores which is also at an all-time high"
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Godfrey Phillips India Limited shows strong profit growth outperforming sales growth, with a 15% 10-year CAGR for profit and a 72% TTM profit growth.
"the compounded profit growth 10 year for sales it was five percent but for profit it is 15% for TTM sales growth it is 30% and TTM profit growth is 72 percent"
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Godfrey Phillips India Limited's stock price has shown a 10-year CAGR of 15% and an 81% increase in the past year.
"stock price CAGR is also fair enough 10 years is at 15 percent one year it has risen quite nicely at 81 percent"
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Godfrey Phillips India Limited's operating cash flow has reached an all-time high of 736 crore INR.
"the operating cash flow is also at an all-time high at 736 crores"
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The stock chart of Godfrey Phillips India Limited exhibits an 'up flag' and 'pennant' pattern, indicating potential bullish continuation.
"this is more like an up flag pattern that has been formed but only this part if you focus on this this is more like a pennant"
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Cigarettes account for 69.2% of Godfrey Phillips India Limited's total revenue, with unmanufactured tobacco contributing another 19.2%.
"if you see here 69.2 percent of the total revenue is contributed only by cigarettes 19.2 percent is contributed by unmanufactured tobacco"
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Godfrey Phillips India Limited experienced a 24.7% growth in revenue within India and a significant 69.9% increase in revenue from outside India in FY23 compared to FY22.
"within India growth as compared to 22 it has grown by 24.7 percent but outside India Revenue has increased by 69.9 percent almost 70 percent increase in sales of products outside India."
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India is the second-largest global tobacco producer, with an annual output of approximately 800 million kilograms.
"India is the second largest producer of tobacco with an estimated annual production of around 800 million kgs."
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Over the past four decades, total tobacco consumption in India has risen by 50%, while legal cigarette consumption has dropped by 43%, and other forms of tobacco (chewing, illegal cigarettes) have increased by 75%.
"the total consumption over the last four decades has increased by almost 50 percent but the consumption of legal cigarettes has gone down by almost 43 percent whereas other forms of tobacco which include something like chewing tobacco or it will also include illegal cigarettes that has gone up by almost 75 percent"
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ITC holds a dominant 78% market share in the organized Indian cigarette market, with Godfrey Phillips India Limited ranking second at 12%.
"ITC has a market share of 78 percent in the organized cigarettes market space second highest is Godfrey Phillips India limited with 12 percent"
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