Radhakishan Damani and Parag Parikh ELSS Portfolio Small-Cap Stock Announces Dividend; Debt-Free Low PE Company Offers 4.54% Yield

With Indian markets seeing a sharp recovery from the April lows and broader markets outperforming, stock-specific action is likely to remain important. In this backdrop, VST Industries has come into focus due to its Dividend yield, low valuation, clean balance sheet and strong FY26 operating performance.

Radhakishan Damani Stake in VST Industries

VST Industries is a Small-Cap company where Ace Investor Radhakishan Shivkishan Damani holds a 3.15 per cent stake, equivalent to 53,51,850 shares. Parag Parikh ELSS Tax Saver Fund also holds a 2.13 per cent stake, which translates to 36,20,200 shares. As per the latest update, FIIs and Mutual Funds have increased their stake in the company to 1.34 per cent and 5.04 per cent, respectively.

Attractive Dividend Yield

VST Industries offers a dividend yield of 4.54 per cent. The company informed the exchanges that its board has recommended a final dividend of Rs 12 per equity share of Rs 10 each for FY26. The record date for the dividend has been fixed as July 10, 2026.

Low PE Valuation

On the valuation front, VST Industries trades at a PE of 15.4x, which is lower than the industry average PE of 16.9x. The company is also virtually debt-free, which adds strength to its balance sheet.

Strong FY26 Performance of VST Industries

VST Industries announced its audited financial results for the quarter and year ended March 31, 2026. The company reported strong year-on-year growth, supported by recovery in cigarette volumes, improved brand execution and productivity initiatives.

The company’s net cigarette revenue rose 25 per cent to Rs 1,151 crore in FY26, compared with Rs 921 crore in the previous year. EBITDA jumped 61 per cent to Rs 450 crore, compared with Rs 279 crore in FY25.

Cigarette Business Leads Growth

The cigarette business remained the key growth driver for the company. Revenue from the cigarette segment stood at Rs 1,732 crore in FY26 as against Rs 1,333 crore in FY25, registering a growth of 30 per cent.

Cigarette volume also improved during the year. Average monthly volume rose to 696 million in FY26 from 641 million in FY25, reflecting growth of 8.6 per cent.

For Q4FY26, cigarette revenue stood at Rs 631 crore compared with Rs 337 crore in Q4FY25. Cigarette volume for the quarter stood at 667 million per month, compared with 647 million per month in the same quarter last year.

EBITDA Margin Expands by 660 Basis Points

The company reported EBITDA of Rs 450 crore in FY26, up from Rs 279 crore in FY25. EBITDA margin improved to 22 per cent from 15.4 per cent, an expansion of 660 basis points.

In Q4FY26, EBITDA stood at Rs 208 crore compared with Rs 70 crore in Q4FY25. EBITDA margin for the quarter improved sharply to 30.3 per cent from 15.3 per cent in the corresponding quarter of the previous year.

PAT Stable; Profit Before Exceptional Item Rises

Profit after tax stood at Rs 292.3 crore in FY26 compared with Rs 290.4 crore in FY25. However, profit after tax before exceptional item grew 43.6 per cent to Rs 292.3 crore from Rs 203.5 crore in FY25.

The exceptional item in FY25 was related to a net gain of Rs 86.9 crore realised from the sale of immovable property.

Tobacco Leaf Business Remains Weak

While the cigarette business delivered strong growth, the unmanufactured tobacco business remained under pressure. Revenue from unmanufactured tobacco declined to Rs 310 crore in FY26 from Rs 473 crore in FY25.

In Q4FY26, the segment reported revenue of Rs 58 crore compared with Rs 116 crore in Q4FY25. The management stated that geopolitical instability in the Middle East continues to weigh on the unmanufactured tobacco business.

Tax Changes Affect Comparability

The company highlighted that with effect from February 1, 2026, the Government of India reduced the levy of Compensation Cess on cigarettes to nil. At the same time, GST and excise duty on cigarettes were increased significantly.

Due to these changes in indirect taxes, the figures for gross sales and excise duty for the quarter and year ended March 31, 2026 are not comparable.

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