RK Damani stock jumps by 10% after posting robust results in Q2

Synopsis: VST Industries shares surged nearly 10 percent after the company posted its Q2FY26 results showing sequential growth in profit and a sharp YoY improvement in margins. 

A tobacco stock saw sharp buying interest after the company announced its September quarter results, which reflected steady profit growth and operational improvement. Investors reacted positively to the rising net profit trend, driving the stock higher in today’s trade.

VST Industries Ltd, with a market capitalisation of Rs. 4,535.29 crore, opened at Rs. 262.05 against the previous close of Rs. 258.70 and touched an intraday high of Rs. 283.35, marking a gain of 9.53 percent. 

What’s the News?

The company declared its Q2FY26 results, which reflected steady earnings growth and operational improvement.

On a quarter-on-quarter basis, sales increased from Rs. 298 crore to Rs. 336 crore, up 12.8 percent, while operating profit rose from Rs. 77 crore to Rs. 79 crore, reflecting a 2.6 percent growth. However, the operating profit margin declined from 26 percent to 23 percent. Profit before tax improved from Rs. 76 crore to Rs. 78 crore, showing a 2.6 percent rise, and net profit advanced from Rs. 56 crore to Rs. 59 crore, up 5.4 percent. Earnings per share increased from Rs. 3.30 to Rs. 3.49, registering a 5.8 percent gain.

On a year-on-year comparison, sales declined from Rs. 360 crore to Rs. 336 crore, reflecting a 6.7 percent drop, while operating profit rose from Rs. 68 crore to Rs. 79 crore, showing a 16.2 percent increase. The operating margin improved from 19 percent to 23 percent. Profit before tax grew from Rs. 65 crore to Rs. 78 crore, a 20 percent rise, and net profit climbed from Rs. 48 crore to Rs. 59 crore, higher by 22.9 percent. Earnings per share advanced from Rs. 2.80 to Rs. 3.49, up 24.6 percent. 

Net profit has increased consecutively over the past two quarters, rising from Q4FY25 to Q1FY26 and further improving in Q2FY26. As of September 2025, Radhakishan Shivkishan Damani held a 3.15 percent stake in the company.

Operational Highlights

In the September quarter of FY26, the company reported an average monthly cigarette volume of 695 million units, up 10 percent from 632 million units in Q2FY25. The cigarette segment revenue rose to Rs. 358 crore, marking a 9.5 percent increase from Rs. 327 crore, while revenue from unmanufactured tobacco fell 30.8 percent to Rs. 92 crore from Rs. 133 crore. EBITDA margin improved to 23.4 percent from 18.8 percent a year earlier.

Management Commentary

Commenting on the performance of the company, Sanjay Wali, Whole-Time Director, said, “Our efforts to enhance our portfolio along with superior micro market execution has resulted in strong volume recovery in the first half of the year. Although unmanufactured tobacco operates in a volatile global environment, we have seen improved performance in Q2. Our cost initiatives are fructifying, and coupled with our efforts on innovation and digitization, we have delivered a double-digit profit growth. We are committed to delivering superior value to both our consumers and stakeholders.”

About the Company

VST Industries Limited, incorporated in 1930 as The Vazir Sultan Tobacco Company Limited, is a leading Indian manufacturer and distributor of cigarettes and tobacco leaf. The company’s products are available across 10 lakh retail outlets nationwide, ensuring over 80 percent market penetration. Its flagship brands, Total and Editions, rank among India’s top 10 cigarette brands. VST interacts with more than 15,000 farmers, sourcing over 20,000 tonnes of tobacco annually. Headquartered in Hyderabad, the company operates manufacturing facilities in Hyderabad and Toopran, Telangana, and continues to drive sustainability through renewable energy and rural development initiatives.

-Manan Gangwar 

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