Godfrey Phillips Share Price Jumps 31% in 3 Days: What’s Driving the Sharp Rally?

Godfrey Phillips India shares have surged 31% in just three trading sessions, helped by cigarette price hikes and easing tax concerns. Here’s what is behind the sudden stock market rally.

Godfrey Phillips Share Price Rally: 31% Gain in Three Sessions

Shares of Godfrey Phillips India rose more than 6% on 19 February 2026, touching a high of ₹2,635 on the BSE. The stock has climbed sharply from around ₹2,065 on 16 February, marking a 31% jump in three days.

By midday on 19 February, the share price was trading near ₹2,552, showing strong buying interest. Trading volumes were also high, which signals active participation from investors.

This rebound is notable because the stock had fallen over 10% since January due to concerns about changes in cigarette taxation. While Godfrey Phillips rallied strongly, other tobacco stocks showed mixed movement. VST Industries saw small gains, while ITC shares remained largely steady.

New Cigarette Tax Structure and Price Hikes Support the Rally

India introduced a new tobacco tax system from 1 February 2026. The earlier GST compensation cess was removed. Cigarettes now attract 40% GST along with a fixed excise duty based on length, ranging from ₹2,050 to ₹8,500 per 1,000 sticks.

In addition, the Union Budget proposed increasing the National Calamity Contingent Duty (NCCD) to 60% from May 2026. However, through a government notification, the current effective rate remains at 25% for now.

These changes initially raised fears that cigarette companies could see profit fall by 8–15% due to higher costs. There were also concerns about growth in the illegal cigarette trade.

However, companies responded quickly by increasing product prices.

Godfrey Phillips raised the price of Marlboro Compact cigarettes from ₹9.50 to ₹11.50 per stick. ITC also increased prices by 20-40% across key brands such as Gold Flake and Classic. Updated pricing is gradually reflecting in retail markets.

The swift price hikes reassured investors that companies may protect their margins better than expected.

Strong FY26 Results Add to Investor Confidence

Apart from pricing action, solid financial results have also supported the stock rally.

For the first nine months of FY26, Godfrey Phillips reported:

• Sales up 22% to ₹12,805 crore
• Net profit up 17% to ₹1,005 crore

In the December quarter (Q3 FY26), the company posted:

• Profit of ₹343 crore, up 9% year-on-year
• Sales growth of 15% to ₹1,828 crore

Margins narrowed slightly due to higher taxes, but demand remained steady.

The company’s unmanufactured tobacco exports stood at ₹1,255 crore, contributing around 22% of total sales. Management has indicated further focus on export growth.

Current Share Price, Valuation and What Investors Are Watching

As of midday on 19 February, Godfrey Phillips shares were trading between ₹2,551 and ₹2,553. The company’s market capitalisation is close to ₹39,800 crore.

The stock currently trades at a price-to-earnings (P/E) ratio of around 25–30, which is slightly higher than some peers. This suggests investors are expecting stable earnings growth despite tax changes.

Going ahead, investors will monitor:

• Impact of higher cigarette prices on demand
• Any further tax revisions
• Volume trends in the coming quarters

While risks remain from lower consumption or illegal trade, the recent rally shows improved confidence in the company’s ability to manage costs.

For now, Godfrey Phillips share price momentum reflects strong pricing action, steady demand, and easing fears over the new cigarette tax structure.