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India Tobacco Industry Report - 2015

  • June 2015
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 29 pages

This report profiles India's tobacco industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including ITC Ltd, Godfrey Phillips India Ltd and VST Industries Ltd.



Tobacco is one of the major commercial crops in India. Despite the health hazards associated with it, the tobacco industry contributes significantly to the economy in terms of employment, income and government revenue. It was the second largest sector in terms of central excise revenue contribution after oil and gas sector. The industry also acts as a major foreign exchange earner for the government. Besides tobacco farming and production, the Indian tobacco industry also consists of companies involved in manufacturing, sales and distribution of tobacco products like cigarettes, cigars, beedis and chewing tobacco.



Fiscal year ended March 2015 was another tough year for the Indian tobacco industry, continuing its challenging environment from FY14. The increase in excise duty induced pressure on the sales volume of cigarette companies in the sector. The tobacco production index saw a marginal growth in FY15, lower than that of the last fiscal year. Steep increase in excise duties and stringent packaging norms has contributed to the lower consumption, particularly of branded cigarettes. Of late, there has been a rise in the sale of illegal and counterfeit products in India. Price hikes by cigarette manufacturers in FY15 resulted in the improvement of profit margins, despite a lower sales volume. However, the consistent rise in excise duty, illegal and counterfeit products and regulatory restrictions remain the biggest challenges for the organized players in the sector.



Key Points:



o During 2010-13, central excise revenues from tobacco products grew at a CAGR of 21%. However, in FY14, excise revenues declined by 10% y/y due to a fall in production.



o During 2007-10, the value of tobacco exports grew rapidly at a CAGR of 35%. Thereafter, it saw a period of contraction followed by double digit growth in the last two years. In FY15, it contracted by 5%.



o The area under tobacco cultivation grew at a CAGR of 7% during 2007-11. The increase in area under cultivation was accompanied by an increase in production. Domestic tobacco production grew at a CAGR of 17% during the same period.



o The index of industrial production grew by 2.8% y/y in FY15. During 2007-13, the production index for tobacco products grew at a CAGR of 1%. In FY15, it saw a growth of 0.9% y/y. Thus, tobacco manufacturing underperformed the overall index in FY15.

Table Of Contents

India Tobacco Industry Report - 2015
1. Industry Profile

1.1 Sector overview

1.2 Sector size

1.3 Competitive landscape

1.4 Environmental scanning



2. Market Trends and Outlook

2.1 Key economic indicators-India

2.2 Tobacco farming

2.3 Tobacco products

2.4 Tobacco exports

2.5 Prices

2.6 Market outlook



3. Leading Players and Comparative Matrix

3.1 Leading Players

3.1.1 ITC Limited (ITC)

3.1.2 Godfrey Phillips India Limited (GPIL)

3.1.3 VST Industries Limited (VST)

3.2 Comparative matrix

3.3 SWOT analysis



4. Tables and Charts

Table 1: Types of tobacco grown in India

Table 2: Key financial ratios of leading players



Chart 1: Share of tobacco production by country

Chart 1: Share of tobacco production by country

Chart 2: Central excise revenues from tobacco products

Chart 3: Value of tobacco exports from India

Chart 4: Results of Indian general elections 2014-Seat share

Chart 5: Current account deficit and fiscal deficit

Chart 6: Percentage of tobacco users within different age groups in India

Chart 7: Quarterly GDP growth rate-India

Chart 8: Average Monthly USD to INR Exchange Rate

Chart 9: Inflation during FY14-India

Chart 10: Repo rate

Chart 11: Weights of different industries in index of industrial production

Chart 12: Y/Y change in index of industrial production

Chart 13: Share of different states in tobacco production

Chart 14: Tobacco production and yield in India

Chart 15: Tobacco yield by states

Chart 16: Usage behaviour of tobacco consumers in India

Chart 17: Usage behaviour of smoked tobacco consumers in India

Chart 18: Usage behaviour of smokeless tobacco consumers in India

Chart 19: Proportion of Indian population by type of tobacco product usage

Chart 20: Cigarette consumption in India

Chart 21: Per capita consumption of cigarettes in Asian countries

Chart 22: Annual tobacco exports (unmanufactured) from India

Chart 23: Annual tobacco exports (manufactured) from India

Chart 24: Wholesale price index of tobacco and tobacco products

Chart 25: Wholesale price index of cigarette and chewing tobacco

Chart 26: Revenue share by different segments of ITC

Chart 27: Net sales of ITC

Chart 28: Profit margins of ITC

Chart 29: Revenue share by different segments of GPIL

Chart 30: Net sales of GPIL

Chart 31: Profit margins of GPIL

Chart 32: Revenue share by different segments of VST

Chart 33: Net sales of VST

Chart 34: Profit margins of VST

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