Dear Shareholders,
The global economic environment in 2025 reflects a phase of cautious
recovery amid continuing uncertainties. While growth remains moderate, supported by
strengthening labour markets and a gradual easing of inflationary pressures, certain risks
continue to persist.
Geopolitical tensions and volatility in commodity prices continue to
shape the external landscape, requiring businesses to remain agile and adaptive. Within
this context, the emphasis remains on prudent risk management and the pursuit of
long-term, sustainable growth.
We can see that some opportunities are emerging across sectors, driven
by the accelerated adoption of technology and sector-specific reforms. Investments in
digital infrastructure and sustainable business practices are reshaping industry
structures and enabling new avenues of expansion. Fiscal consolidation, coupled with a
focus on innovation and operational efficiency, will be essential in enhancing
competitiveness and resilience. Recent forecasts around global institutional economic
outlook suggest a stable, albeit measured, global growth outlook. Infrastructure
development and the growing transition towards environmentally sustainable technologies
offer further support. While certain headwinds remain, improved policy coordination and
increased predictability in the business environment provide a more supportive backdrop
for corporate planning and investment.
India continues to exhibit robust economic momentum, underpinned by
resilient domestic demand, enhanced capital expenditure, and sustained progress on
structural reforms. Growth in the industrial and services sectors has been reinforced by
public infrastructure investments and demographic advantages. Despite global challenges
such as worsening geopolitical situation, likely trade disruptions arising from reciprocal
tariffs announced by Trump administration and climate-linked vulnerabilities, India
remains well positioned to maintain its growth trajectory and deepen its integration with
global value chains particularly through renewed thrust on bilateral trade agreements.
The Indian tobacco sector continues to play a significant role in
supporting rural livelihoods and contributing to overall economic activity.
Tobacco cultivation is concentrated in agro-climatic zones with limited
alternatives, thereby sustaining millions of farming families. The sector also contributes
meaningfully to export revenues and provides employment across the value chain. These
socio-economic linkages underline its continued relevance within regional development
frameworks.
However, the domestic legal cigarette industry continues to face
regulatory challenges, more particularly with respect to taxation policy, which have
inadvertently contributed to the expansion of the illicit tobacco trade over a period of
time. This remains an area of concern, as it not only undermines stated policy on public
health but also contributes to revenue leakages for the government exchequer. Of late, the
enforcement measures against illicit trade have intensified, but sustained resolution will
require coordinated efforts between the tobacco industry stakeholders and government
agencies to uphold market integrity and policy effectiveness.
In FY25, Godfrey Phillips India achieved strong financial performance,
reporting a 34% increase in consolidated Gross Sales Value to Rs14,480 crore and
Consolidated Net Profit from continuing operations rising by 24% toRs1,153 crore. This
growth was supported by higher domestic cigarette volumes and deeper penetration in
international markets for unmanufactured tobacco. Our longstanding partnership with Philip
Morris International for the iconic ‘Marlboro' brand, along with a growing
relationship with Ferrero India in the confectionery business, continues to strengthen our
market position and to diversify revenue streams.
We have also made measurable progress in integrating business
sustainability with social and environmental responsibility. Our Dow Jones
Sustainability Index score improved from 43 to 64 in FY25, reflecting
our ongoing focus on ESG principles. As a company deeply connected to agriculture and
tobacco trade, focus in our CSR programs remains on empowering tobacco growing community,
ensuring sustainable livelihoods, and contributing meaningfully to ecological balance. Our
efforts through various CSR initiatives reflect our commitment to inclusive development
and shared value creation.
We were recognised as a ‘Great Place to Work' for the seventh
consecutive year, underscoring our continued commitment to building a supportive and
performance-driven work environment. Initiatives such as the Employee Share Purchase
Scheme 2024 were introduced to align long-term employee interests with business growth,
contributing to talent retention and organisational stability.
As we look ahead, we remain focused on reinforcing our position in the
domestic market, accelerating international expansion, and driving innovation across our
product portfolio. Sustainability, governance, and regulatory alignment will remain
central to our strategic roadmap. We believe that responsible growth, underpinned by sound
environmental and social practices, will enable us to deliver consistent value to all our
stakeholders. Therefore, we are supremely confident in our ability to build a
future-ready, resilient, and responsible Godfrey Phillips India.
To conclude, I extend my sincere appreciation and gratitude to our
employees, management team, board of directors, farming community, customers, business
partners, bankers, other stakeholders and government authorities for their invaluable
support, guidance and cooperation. Also, I wish to extend my heartfelt thanks to you, our
dear shareholders, because your trust remains the cornerstone of our continued progress.