| Godfrey Phillips India Limited | ||||||
| Ratings reaffirmed at 'Crisil AA+/Stable/Crisil A1+' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its 'Crisil AA+/Stable/Crisil A1+' ratings on the bank facilities and commercial paper of Godfrey Phillips India Ltd (GPIL).
Operating income (net of excise) grew to Rs.5610 crores in fiscal 2025 from Rs.4395 crores (includes revenues from 24 Seven stores) in fiscal 2024, driven by healthy growth in cigarettes segment and sale of unmanufactured tobacco. The revenue for fiscal 2024 of net of 24Seven business was Rs 3993 crores. Operating profitability remained at 21.4% in fiscal 2025 as against 20.0% in the previous fiscal mainly due to higher share of cigarettes and discontinuation of loss-making retail business operated under 24Seven brand. Revenue growth is expected to remain healthy over the medium term while the operating margin are expected to remain over 21% supported by discontinuation of loss making 24Seven stores.
The financial risk profile is expected to remain strong due to nil repayment obligation, healthy debt protection metrics and superior liquidity; cash surplus and investments were over Rs 2405 crore as on March 31, 2025.
Crisil Ratings has taken note of the ongoing dispute among members of the K.K. Modi family. The matter has not impacted the business operations of GPIL as per the management articulation. Crisil Ratings will continue to monitor the developments and any impact on business operations and liquidity will be key monitorable.
The ratings continue to reflect healthy market position of GPIL in the Indian cigarette industry and strong financial risk profile. These strengths are partially offset by exposure to risks related to geographical concentration in revenue, intense competition, and unfavorable regulatory changes. |
Analytical Approach Crisil Ratings has considered the standalone financial and business risk profiles of GPIL because operations of wholly-owned subsidiaries—International Tobacco Company Ltd, White Horse Reality Ltd and investment companies—do not have any material bearing on its financials. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Superior In the absence of any repayment obligation, the entire cash accrual -- projected at Rs 850-900 crore per annum for fiscals 2026 and 2027 – will be used to meet the capital expenditure (capex) and working capital requirements. Cash and cash equivalents were strong at over Rs 2,405 crore as on March 31, 2025. Utilisation of the fund-based bank limit was negligible during the 12 months through July 2024.
ESG profile Crisil Ratings believes the environment, social and governance (ESG) profile of GPIL supports its already strong credit risk profile.
The tobacco sector has a high environmental impact because of its raw material sourcing strategies and waste-intensive processes. It also has a high social impact owing to health hazards associated with the use of tobacco, including smoking addiction and underage consumption, as well as risk of government intervention by way of restriction on sales, regulation of marketing practices and higher tax.
The company’s strong focus on addressing some of these ESG risks supports its already strong credit risk profile.
Key ESG highlights:
There is growing importance of ESG among investors and lenders. Crisil Ratings believes the company’s continuous commitment to embedding sustainability principles across the organization and its value chain will partly offset the inherent impact of the tobacco sector on environment and social aspects. |
Outlook: Stable GPIL will continue to benefit from its healthy market position and strong financial risk profile. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company GPIL is an associate of the KK Modi group of companies and Philip Morris Global Brands Inc (Philip Morris; [rated ‘A-/Positive/A-2’ by S&P Global Ratings]). The KK Modi group owns 47.48% equity shares of the company, and Philip Morris owns 25.1%. GPIL primarily manufactures cigarettes. It has diversified into segments such as confectionary, and Ferrero products. |
Key Financial Indicators
^ Interest cover does not include interest on lease liabilities *Basis 12 months financial results and the financials/ratios mentioned are for continued operations only |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
& - Interchangeable with other non-fund-based facilities and Interchangeable with letter of credit
% - Fund-based facility; interchangeable with other fund-based and 100% interchangeable with non-fund-based facilities
$ - Interchangeable with other fund-based/non-fund-based facilities
# - Fund base facility with sublimit of Rs.4 Cr as PCL/FBP/FBN facility
@ - Fund-based facility; interchangeable with other fund-based facilities
! - Interchangble with other non-fund base facility
~ - Fund base facility interchangeable with other export related fund base facility and 100% interchangeable with CC/BP/BD
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||
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Criteria Details
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