This cigarette stock turned Rs 1 lakh into Rs 7.58 lakh in ten years; clocked higher returns than ITC, Godfrey Phillips

VST Industries share price has delivered 658% returns to shareholders in last ten years. An investment of Rs 1 lakh in VST Industries stock on October 16, 2009 would have grown to Rs 7.58 lakh today. The Hyderabad-based cigarette maker has outperformed its peers during the period.

Key competitors such as ITC and Godfrey Phillips could clock 193.41% and 180.91% growth in their stock prices in last ten years. On October 16, 2009, the share price of manufacturer of the well-known brand Charminar closed at Rs 505.75 compared to Wednesday's close of Rs 3,835 on BSE.

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The midcap share has gained 35.44% in the last one year and risen 16.19% since the beginning of this year. VST Industries has seen an average growth of 20% in the last four quarters.

Despite strong growth, its price to equity (P/E) ratio stands at 24.55 compared to the industry P/E of 29.14. For the quarter ended June 2019, the firm posted a 23.58% rise in net profit to Rs 75.68 crore compared to the Rs 61.24 crore profit reported in the corresponding quarter of previous fiscal. Total income rose 25.61% to Rs 340.99 crore in Q1 of current fiscal compared to Rs 271.41 crore in the corresponding quarter of previous fiscal.

The firm has improved its financial performance which has helped the stock clock decent growth during last 10 years. For fiscal ended March 2019, the firm logged Rs 1,097.61  crore in sales compared to Rs 475.01 crore for fiscal ended March 2010.

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Net profit rose also rose steadily during the period. For fiscal ended March 2019, the firm logged Rs 226.84 crore in net profit compared to Rs 74.46 crore for fiscal ended March 2010. Earnings per share for the fiscal ended March 2019 stood at  Rs 146.90 compared to Rs 40.18 for March 2010.

Return on capital employed for fiscal ended March 2019 rose to 51.37% compared to 23.92% for March 2010 fiscal. Dividend per share also tripled in last ten years. Dividend per share for March 2019 fiscal stood at Rs 95 compared to Rs 30 in March 2010.