Story:Godfrey Phillips India Limited engages in the manufacture and sale of cigarettes, chewing products, and tea primarily in India. It also offers unmanufactured tobacco and mouth freshener. The company sells its cigarette products under the FS1, Four Square, Marlboro, Red & White, North Pole, Cavanders, Tipper, Stellar, Force 10, Jaisalmer, Originals, and Ultima brands; pan masala under the Pan Vilas brand; and various fine teas, such as Assam, Darjeeling, and green tea under the Tea City, Symphony, Super Cup, Super Cup Duet, Utsav, and Rangoli names. Godfrey Phillips India Limited distributes its products through a network of approximately 500 distributors and 800,000 retail outlets. The company's topline for the nine months ended December 2011 grew by 8.2 per cent to Rs 2,400 crore. This was driven by a combination of increases in volumes of cigarettes sold, and price hikes undertaken leading into 2011 Budget.The largest contributing factor was price hikes undertaken in anticipation of excise duty hikes in early 2011 (the latter did not happen). These hikes coupled with relatively stable operating costs helped operating profit margins increase by 1.4 percentage points to 18.3 per cent. Net profits during the same period grew by 27 per cent to Rs 139 crore.Godfrey Phillips has also been among the most consistent in terms of volume growth managing a compounded pace of 6.5 per cent between 2006 and 2011. But, the hike in excise duties on cigarettes announced in this year's Budget means, companies will have to hike rates by 10-20 per cent to maintain status quo on margins.Godfrey Phillips has enjoyed a stellar run on the bourses clocking up gains of 97 per cent over the course of the last one year. The outperformance is a result of market conviction in the ability of cigarette majors to pass on cost increases and hold fort on the volume growth front.Present momentum may take it to higher levels.