Godfrey Phillips (GODFRYPHLP)
StalwartFairStock Score: 63/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹2,149 |
| Market Cap | ₹33,520.48 Cr |
| P/E Ratio | 24.51 |
| ROCE | 26.32% |
| ROE | 24.48% |
| Dividend Yield | 2.33% |
| Profit Growth | -51.4% |
| Debt/Equity | 0.04 |
| Sales Growth | 98.84% |
| Free Cash Flow | ₹509 Cr |
| Promoter Holding | 72.58% |
| 52-Week Range | ₹1,832.1 — ₹3,947 |
| Sector | Cigarettes & Tobacco Products |
| Book Value | ₹398.29 |
Strengths
- High profitability: ROE of 24.48% and ROCE of 26.32%.
- Near-zero leverage: Debt/Equity of 0.03 with positive free cash flow of ₹509 Cr.
- Strong growth: 5-year revenue CAGR of 17.32% and latest profit growth of 27.51%.
- High promoter holding of 72.58%, aligning management with minority shareholders.
- Healthy financials: Piotroski F-Score 7/9 and Altman Z-Score 5.08.
Concerns
- Expensive valuation: P/E of 25.42, P/B of 6.40, and EV/EBITDA of 33.45.
- No margin of safety: Price is far above Graham Number of ₹789.15 and DCF value of ₹536.27.
- Regulatory and taxation risk inherent in the cigarettes and tobacco industry.
- PEG of 1.57 suggests current earnings growth may already be priced in.
AI Analysis
Reading the numbers, I see a business with the kind of economics I admire, but the price tests my discipline. Godfrey Phillips earns a return on equity of 24.48% and returns on capital of 26.32%, with virtually no debt—debt-to-equity of 0.03. That is a fortress balance sheet. Free cash flow of ₹509 crore supports the dividend, and promoter holding of 72.58% aligns owners with management. The growth is real: five-year revenue CAGR of 17.32%, latest profit up 27.51%, and a recent quarter with ₹343 crore net profit on ₹1,829 crore sales. A Piotroski score of 7 and Altman Z of 5.08 confirm financial health. The moat? Cigarettes are a sin business with pricing power and high barriers to entry. But I cannot ignore valuation. At ₹2,153, the stock trades at 25.42 times earnings, 6.40 times book, and an EV/EBITDA of 33.45. Graham's number says intrinsic value is around ₹789, and even a conservative DCF tells me ₹536. The negative margin of safety is a red flag. The market is paying a premium for past growth. With PEG at 1.57, the current price already discounts continued momentum. I like the business. I always have. But value investing demands a margin of safety. At this price, I would wait, not chase. If the stock were to correct meaningfully, or if earnings grow into the valuation over years, Godfrey Phillips could be a fine holding. For now, it is a great company at an unattractive price. I would keep it on my watchlist and let patience be my advantage.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer