Best Tobacco Stocks in India 2025

Tobacco stocks in India trade with the ability to withstand high market volatility. The tobacco industry in India is a major contributor to economic growth and employment creation. It employs about 4,57,00,000 people in India. The tobacco industry in India has robust growth potential but consistently deals with higher regulations for packaging, distribution, and marketing. 

Thus, it is essential to research the best tobacco stocks in India and select the high-potential ones to generate excessive income. This blog includes a list of tobacco stocks and potential investing options. You can also go through this research to simplify your investment journey in the tobacco industry. 

What are Tobacco Stocks?

Tobacco stocks are the equities of businesses operating in tobacco products like smokeless tobacco, beedis, and cigarettes. Investing in these stocks benefits investors from the dedicated customer base of tobacco companies in India. Thus, these stocks might show resilience to economic slowdowns. Moreover, growing health consciousness might require legal authorities to impose stringent regulations in the tobacco industry, which could be a hurdle for investors in generating higher returns.  

Best Tobacco Stocks List By Market Capitalisation

*Data is updated as of 19th December 2024

Factors to Consider When Investing in Best Tobacco Stocks in India

The best tobacco stocks in India come with high growth potential and impressive dividend yields. But, it is important to note that an uncertain situation in the Indian stock market could impact their performance. Thus, it is essential to consider crucial factors to deal with such uncertainties. Let’s explore them. 

• High Regulations: Legal authorities have imposed higher regulations on tobacco companies in India. Investors should stay informed about the regulatory changes to analyse their impact on stock prices. For example, if the government increases tobacco product taxes, it might significantly decrease the company’s profit margins. Thus, it would impact the prices of the best tobacco stocks in India in the long run. Avoid investing in companies struggling to comply with legal requirements imposed. 
• Competitiveness: High competition in the tobacco industry encourages organisations to perform better with their long-term strategies. It is essential to analyse the capabilities and market share of tobacco companies to invest in the best tobacco stocks in India. 
• Budget Announcements: Every year in February, the government announces a budget to foster economic growth in the country. Stay updated on developments related to the tobacco industry that are likely to be announced during the budget to analyse their impact on the best tobacco stocks in India in advance. Moreover, you can make required alterations in your portfolio to eliminate the risk of any uncertain policy on tobacco products. 
• Dividend Payouts: Tobacco stocks in India are recognised as the best investing options for dividend seekers. Consistent dividend payouts are the primary reason that attracts most investors to invest in such stocks. Assess the dividend payout ratio of the tobacco companies in India and analyse their potential to maintain this ratio to make an informed investment decision. 
• Technical Indicators: Consider the technical parameters such as PE ratio, PB ratio, etc. These parameters would help you know about the potential of the best tobacco stocks in India to invest in. 

Best Tobacco Stocks Based on 1-Year Returns

*Data is updated as of 19th December 2024.

Dividend Yield in Best Tobacco Stocks in India

*Data is updated as of 19th December 2024.

Advantages of Investing in Best Tobacco Stocks 

Apart from capital appreciation, investing in the best tobacco stocks in India might offer investors several benefits. Explore them in the below section. 

• High Dividend Income: The best tobacco stocks often declare high dividend payouts for their investors. Dividend yield is not a part of capital appreciation. It is a kind of regular income that investors receive. Steady cash flow positions of tobacco companies in India help them retain investors with high dividend yields every year. 
• Brand Loyalty: Tobacco products offer companies strong customer loyalty. It influences consistent sales and helps them maintain revenue stability. Effective brand loyalty makes the best tobacco stocks in India a potential investment option for long-term investors. 
• Resilient Nature: Tobacco products come with stable demand. Thus, they can help companies earn stable revenue or profitability. During economic crises like recession, inflation, etc., demand for tobacco products does not have much impact. It makes the best tobacco stocks in India resilient to volatility/economic slowdowns. 
• Global Exposure: Tobacco companies in India operate with robust demand in foreign nations. It helps them diversify their revenue streams. Moreover, global exposure to the best tobacco stocks in India provides investors with higher returns and risk mitigation capabilities. 

Emerging Trends in Tobacco Industry

Have a look at some emerging trends related to the Indian tobacco industry to make an informed investment decision on the best tobacco stocks in India. 

1. Biotechnology

Selective breeding is being used to create a renewable fuel source from tobacco. The use of biotechnology is currently the focus of companies involved in this promising sector. The achievement of modern biotechnology could make tobacco less harmful to people. It will also help reduce health hazards among people who are involved in smoking activities. 

2. Biodegradable Filters

Companies are now using lyocell to develop new biodegradable filters. It could be a significant development in the Indian tobacco sector, which might encourage investors to invest in the best tobacco stocks in India. 

3. Flavor Inserts

Cigarettes now come in a variety of flavours. It becomes possible by inserting a click ball into cigarette filters. Inserting new flavours could help tobacco companies increase their sales figure. As a result, the best tobacco stocks in India are likely to deliver higher returns in the coming decades. 

Note: Conduct your own research on the best tobacco stocks in India before investing in them. You can also consider financial advisors to get the best stock recommendations.  

Risks Associated With Tobacco Stocks

The best tobacco stocks have the potential to deliver returns but also come with multiple risks. Identify and assess these risks to make an informed investment decision. Refer to the table below. 

Let’s Wrap

Tobacco stocks could prove to be lucrative investment opportunities for long-term investors seeking dividend income. These stocks may often face hurdles due to higher regulations imposed on the company’s advertising, packaging, and distribution. To overcome these hurdles in your investment journey, it is important to consider some crucial factors. These factors might include regulations, competition, and dividend yield. Conduct research on the best tobacco stocks in India to influence your investment journey and pick the high-potential options among them. 

FAQs

1. Which tobacco stocks are listed on the NSE?

Ans. Here are some of the best tobacco stocks in India listed on the national stock exchange. 

• ITC Ltd. (NSE: ITC)
• Godfrey Phillips India Ltd. (NSE: GODFRYPHLP)
• Golden Tobacco Ltd. (NSE: GOLDENTOBC) 

2. How to invest in tobacco stocks in India?

Ans. To invest in the best tobacco stocks in India, consider the following steps. 

• Step 1: Conduct research on the best tobacco stocks in India and choose the reliable investing options. 
• Step 2: Identify and assess your investment goals and choose a path to achieve them optimally. 
• Step 3: Open a demat account with a broker and consult your financial advisor. 
• Step 4: Place a transaction through the demat account and execute it to get shares transferred. 
• Step 5: Monitor your returns in the portfolio section and wait for the right time to book profit. 

3. Is it good to invest in tobacco stocks?

Ans. Tobacco stocks in India might offer investors with a resilience to economic slowdowns. They also come with higher dividend payouts and help people meet their daily expenses. Apart from high dividend yield, investors can generate impressive returns from these stocks. Conduct research on the best tobacco stocks to make your portfolio diversified. 

4. Who can invest in tobacco stocks?

Ans. Long-term investors looking to generate returns with resilient investing options and seeking dividend income from the Indian stock market should consider investing in the best tobacco stocks in India. Moreover, tobacco companies are bonded with high regulations, and it is essential for investors to have a risk tolerance behaviour when investing in them. 

Read Other Popular Articles from Univest

Best Multibagger Stocks For Next 5 Years in India

FMCG Sector Stocks to Invest in India

Best Fundamentally Strong Stocks For Long Term

Top Green Energy Stocks in Buy In 2025 

Fundamentally Strong Stocks In BSE 

Solar Penny Stocks in India 2025

Top 10 Fundamentally Strong Penny Shares to Buy in 2025

Explore Current and Previous IPOs

Univest Screeners

52-Week Low Stocks Today

*Data is updated as of 11th February 2025. 

52 Week High Stocks Today

*Data is updated as of 11th February 2025. 

Popular Stocks to Consider