If we assume that intensity of taxes have affected recently to Ciggarette industry, at least VST industries appear to be escaped that. Find enclosed Moneylife 10 years Wealth creation study data. We find VST Industries being consistent candidate appearing with around 20% CAGR.
Except for first 4 studies of Moneylife, it appears in next 10 edition of decade wealth creation. On the thread I also shared Global trends showing Cigarette being among few cockroach surviving since Dianosour ages.
The key call one should take that future would be like past. This is big assumptions and may not be correct in very long term given the awareness and health issues. In fact, the health issue generated by Fast foods would be comparable (given the scale at which it gets consumed), if not more, then Cigarette in my opinion.
Having said, I would keep monitoring trend, sales growth, profitability and distribution. Considering the recent performance of ITC versus Godrey and VST industries, I find that small players have relatively performend better than Largest players. The reason I do not know. But if that trend continue, no competition from newer player, huge bargaining power with customer and regulatory pricing (taxes are passed on to customer). Despite volume growth decline over decade, the profitability has continue to grow. It may not be blockbuster but would be above average performer in my view. My view is right or wrong, would be known only after 10-15 years:grinning:
So please do your due dilgence before taking any investment decision
Discl: Same as in previous message