Godfrey Phillips India shares fell as much as 7% on Tuesday, sliding to a day’s low of ₹2,045, after Q1 profit fell 44% to ₹198.4 crore.

The cigarette maker, known for distributing Marlboro in India, saw its consolidated net profit drop to ₹198.4 crore for the June quarter, down from ₹356.3 crore in the same period last year.

Operating income more than doubled to ₹3,819.6 crore on paper, though that jump reflects a change in how excise duty and GST now get counted within revenue, following tax rules that kicked in earlier this year.

Stripped of that effect, core business income was down close to 19% year on year. Revenue was less affected than profitability. EBITDA fell 46.3% to ₹181.4 crore, and the operating margin narrowed to 15.1% from 22.7% a year earlier.

Cigarette volumes slipped 2% year on year. The company’s CEO, Sharad Aggarwal, said the steep tax hike pushed through in the January-March quarter is the main reason profit came in lower.

To soften the impact on smokers and protect its market share, Godfrey Phillips has chosen to spread out its price increases over time rather than pass on the full hit at once.

Separately, the company has been dealing with the aftermath of a fire at a third-party facility in Prakasam, Andhra Pradesh, last October. It received a ₹100 crore interim insurance payout during the quarter against a larger claim still being processed.

The board has set August 11 as the record date for the company’s final dividend of ₹33 per share for FY26.

The stock had been on a strong run into results, gaining nearly 8% over the four sessions before the announcement. At 11:17 am on Tuesday, it was trading around ₹2,047 on the NSE, still down about 7.4% for the day.

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