Elitecon International vs ITC & Godfrey Phillips India: How an Export-Led Model Outperformed Domestic Tobacco Leaders in 2026?

On Friday, shares of Elitecon International Ltd (EIL) surged 2.40 per cent to an Intraday high of Rs 104.90 per share from its previous closing of Rs 102.44 per share. The stock’s 52-week high is Rs 422.65 per share and its 52-week low is Rs 10.17 per share. While shares of ITC Ltd plunged over 5 per cent to a 52-week low of Rs 345.35 per share and shares of Godfrey Phillips India Ltd fell 4.60 per cent to Rs 2,184.60 per share.

The Indian tobacco and FMCG landscape is witnessing a dramatic divergence. While established giants like ITC and Godfrey Phillips India (GPI) are reeling from a massive Tax overhaul in early 2026, Elitecon International Ltd is thriving. By pivoting to an aggressive export-led model, Elitecon has not only insulated itself from domestic volatility but has actively outperformed its peers.

The "New Year" Tax Shock: Why Domestic Giants Tumbled

On January 1, 2026, the Indian government notified a new tax regime that fundamentally altered the cost structure for tobacco products. Effective February 1, 2026, the GST compensation cess was replaced by an additional excise duty, ranging from Rs 2,050 to Rs 8,500 per 1,000 sticks based on length.

This policy shift triggered a massive sell-off:

• ITC Ltd: Shares plunged nearly 10 per cent in a single session, hitting a three-year low. Investors fear the impact on core cigarette volumes, which remain ITC's primary profit engine.
• Godfrey Phillips: The impact was even more severe, with shares plummeting up to 19 per cent. GPI’s high concentration in the domestic segment and its license for 'Marlboro' leave it highly exposed to these domestic tax hikes.

Elitecon International: The Export Powerhouse

In stark contrast, Elitecon International (formerly Kashiram Jain & Co) has become a "policy-insulated" success story. By focusing on international markets, the company has turned domestic headwinds into global tailwinds.

1. Strategic Isolation from Local Taxes

Tobacco exports in India are zero-rated under GST. Because Elitecon exports to over 50 countries (including the UAE, Singapore, and the UK), it is not subject to the new domestic excise duty. This allows Elitecon to maintain stable margins while its competitors are forced to choose between hiking prices or absorbing costs.

2. Record-Breaking Financial Performance

Elitecon's strategy is reflected in its explosive growth:

• Revenue Surge: In Q2 FY26, the company reported a 6.4x increase in sales (approx. Rs 505 crore).
• Half-Year Growth: H1 FY26 net sales skyrocketed by 581 per cent compared to the previous year.
• multibagger Returns: The stock has delivered a staggering 9,400 per cent return over three years, significantly outperforming the broader tobacco sector.

3. Massive Global Contracts

In December 2025, Elitecon secured a transformative two-year export contract worth Rs 875 crore (USD 97.35 million) with Yuvi International Trade FZE. This deal ensures long-term revenue visibility and reinforces its footprint in the Middle East.

Comparative Business Model Summary

Diversification Beyond Tobacco

Elitecon is also de-risking its portfolio through aggressive FMCG expansion. The recent acquisition of majority stakes in Landsmill Agro and Sunbridge Agro has fast-tracked its entry into edible oils and snacks. This shift toward agro-commodities provides a secondary engine for growth, further distancing the company from the regulatory pressures facing the tobacco industry.

Bottom Line

The 2026 tax regime has created a clear divide in the industry. For domestic-heavy players like ITC and GPI, it is a period of margin pressure and volume uncertainty. For Elitecon International, the export-led model has proven to be a masterclass in strategic positioning, turning a local regulatory hurdle into a global competitive advantage.

Disclaimer: The article is for informational purposes only and not investment advice.