India Rejects Relaxation of E-Cigarette Ban, Impacting Philip Morris
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy PM?
Source: Newsfilter
- Ban Remains: The Indian government has firmly ruled out any relaxation of the 2019 ban on e-cigarettes and heated tobacco products, significantly impacting Philip Morris International's plans to expand in this key market, particularly with its IQOS device.
- Market Share Shift: According to Euromonitor, Philip Morris held a 7.6% share of India's cigarette market in 2024, up from just 1.75% in 2019, indicating gradual penetration into the traditional cigarette market, yet the ban limits further growth potential.
- Lobbying Efforts: Philip Morris has engaged in a four-year lobbying campaign to persuade Indian officials to legalize heated tobacco devices, but the health ministry's reaffirmation of the ban highlights the challenges the company faces in influencing policy.
- Global Impact: With 151 billion IQOS units sold globally, the product's success in other markets underscores Philip Morris's commitment to advocating for public health policy changes based on scientific data, despite facing regulatory hurdles in India.
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Analyst Views on PM
Wall Street analysts forecast PM stock price to fall
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 188.950
Low
158.00
Averages
181.63
High
200.00
Current: 188.950
Low
158.00
Averages
181.63
High
200.00
About PM
Philip Morris International Inc. is an international tobacco company. The Company’s product portfolio primarily consists of cigarettes and smoke-free products. Its smoke-free business (SFB) also includes wellness and healthcare products, as well as consumer accessories, such as lighters and matches. The Company’s segments include Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region (SSEA, CIS & MEA); East Asia, Australia & PMI Global Travel Retail (EA, AU & PMI GTR), and Americas Region. The Company's brands include Marlboro, HEETS, IQOS, IQOS ILUMA, TEREA, VEEV and ZYN. Its IQOS smoke-free product brand portfolio includes heated tobacco and nicotine-containing vapor products. Its international cigarette brands are Chesterfield, L&M, and Philip Morris. It also owns a number of local cigarette brands, such as Dji Sam Soe and Sampoerna A in Indonesia, and Fortune and Jackpot in the Philippines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Philip Morris's Successful Transformation: Goldman highlights that Philip Morris is transforming into a faster-growing and more profitable business, with shares up nearly 18% year-to-date, indicating significant upside potential as it delivers strong earnings growth.
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- Technical Analysis Tool: Comparing the current share price to the 200-day moving average can provide investors with valuable insights for technical analysis, aiding in the assessment of market trends and potential buy or sell opportunities.
- ETF Unit Trading Mechanism: Exchange-traded funds (ETFs) trade similarly to stocks, where investors are buying and selling “units” that can be created or destroyed based on investor demand, impacting the ETF's liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs helps identify those experiencing notable inflows (new units created) or outflows (old units destroyed), allowing for an assessment of their impact on underlying assets and shifts in market sentiment.
See More
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- Ban Impacts Expansion: India's steadfast ban on e-cigarettes and heat-not-burn tobacco products has significantly hindered Philip Morris International's plans to launch IQOS in the Indian market, despite years of lobbying efforts.
- Unrealized Market Potential: Although India ranks as the seventh-largest cigarette market globally, Philip Morris executives discussed the long-term value creation potential of IQOS with state officials at Davos, but failed to secure an exemption, highlighting market resistance.
- Growth in Smoke-Free Products: Since 2014, Philip Morris's smoke-free products have attracted over 35 million users, with sales from 27 markets now accounting for over 50% of total revenue, indicating strong momentum in other markets.
- Strong Financial Performance: In fiscal 2025, Philip Morris's cigarette and heated tobacco unit shipment volume rose 1.7% to 379.6 billion units, with India contributing a remarkable 39.2% growth, showcasing the potential market opportunities in the region.
See More
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- Conference Schedule: Philip Morris International will host a live audio webcast on February 18, 2026, at 10:00 AM ET during the CAGNY Conference, featuring Group CEO Jacek Olczak and CFO Emmanuel Babeau, which is expected to attract significant attention from investors and analysts.
- Portfolio Transformation: The company is committed to delivering a smoke-free future, with its current product portfolio including heat-not-burn, nicotine pouches, and e-vapor products, and by the end of 2025, over 43 million legal-age consumers globally are expected to use these smoke-free products, indicating a gradual shift away from traditional cigarettes.
- Revenue Contribution: As of 2025, the smoke-free business accounted for 41.5% of total net revenues, demonstrating significant financial achievements during the transformation process and laying a solid foundation for future growth.
- R&D Investment: Since 2008, Philip Morris has invested over $16 billion in developing and commercializing innovative smoke-free products, showcasing its strong capabilities in scientific assessment and market research, with the aim of completely ending cigarette sales.
See More
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- Tobacco Product Growth: Philip Morris's smoke-free portfolio continued to drive performance in Q4, with Zyn nicotine pouch shipments rising 18% year-over-year and 20% in the U.S., indicating strong consumer demand for innovative tobacco products and further solidifying the company's market position in the tobacco industry.
- Robust Financial Performance: The company reported a 3.7% year-over-year organic revenue increase to $10.4 billion in Q4, with overall revenue climbing 6.8% and adjusted EPS rising 9.4% to $1.70, reflecting resilience and profitability amid market challenges.
- Positive Future Outlook: Philip Morris forecasts organic revenue growth of 5% to 7% in 2026, despite pressures from declining traditional cigarette volumes, while smoke-free product volumes are expected to rise by high single digits, showcasing the company's potential during its transformation.
- Strong Cash Flow Projections: The company anticipates generating $45 billion in operating cash flow over the next three years, with growth expected to accelerate in 2027 due to the end of taxation equalization in Japan for heated tobacco units and the launch of Iqos in the U.S., indicating strategic positioning in new market expansions.
See More
