Is British American Tobacco (BTI) stock Halal?

British American Tobacco represents shares of the multinational tobacco company British American Tobacco (BAT) that are available to U.S. investors in the form of American Depositary Receipts (ADRs). Headquartered in London, BAT is one of the world's leading tobacco and nicotine product manufacturers. The company’s portfolio includes a range of products such as combustible cigarettes, vapor products, tobacco heating products, oral tobacco, and nicotine products. Before any of that matters to a Muslim investor, one question comes first: is British American Tobacco stock Halal?

Is British American Tobacco Shariah compliant?

Consumer staples companies like British American Tobacco face the screening question at the shelf, not the balance sheet: does any revenue come from alcohol, tobacco or other impermissible lines? AAOIFI Shariah Standard No. 21 tolerates such income only below 5% of revenue, with the financial ratios checked behind it.

Does British American Tobacco pass the business activity test?

The activity screen is only part of the picture this month: British American Tobacco currently fails the non-permissible income and interest-bearing debt screens, so the overall verdict is not compliant regardless of the business itself. The watch item is the product mix: any alcohol, tobacco or similar lines count against the 5% ceiling.

Is British American Tobacco's income Halal?

No. British American Tobacco's income from impermissible sources currently exceeds AAOIFI's 5% revenue ceiling, which makes the stock non-compliant on this screen regardless of the others. The screen is reassessed monthly, so the status can change when new financial statements arrive.

Does British American Tobacco meet AAOIFI's debt and investment ratio requirements?

Not in full. Interest bearing debt currently exceeds the 30% cap, while the other ratio stays within it. One breach is enough to fail the screening; the ratios are reassessed monthly under our Shariah Supervisory Board.

Tabadulat is an ADGM regulated brokerage whose license covers Shari'a Compliant Regulated Activities, as the FSRA permission names them. New to the terminology? Gharar and Maysir, Sukuk, Zakat and purification are all explained in plain English.

New to the four screens? Read What is Halal Investing? A Guide to Halal Stocks and Islamic Finance