ITC reports 18.6% profit decline as cigarette volumes fall, FMCG revenue hits 14-quarter high

ITC Ltd said its consolidated net profit fell 18.6% to Rs 5,126 crore in the September quarter (Q2 FY27) compared with Rs 4,394 crore a year earlier, as cigarette volumes remained under pressure. The company attributed the decline to a sharp rise in excise taxes on cigarettes. Revenue from operations grew 44% to Rs 30,578 crore over the same period.

EBITDA dropped 17.4% to Rs 5,160 crore and the margin narrowed to 28% from 34.6% a year ago. By contrast, the conglomerate's non-cigarette businesses recorded a 19% year-on-year revenue increase, marking the fourth consecutive quarter of double-digit growth and the highest level in 14 quarters. Biscuits, snacks, noodles, spices, salt, frozen snacks, home-care products and notebooks each posted growth of more than 20%, while dairy and personal wash segments grew in the high-teens.

"The operating environment continued to be characterised by heightened uncertainty amidst renewed geopolitical tensions and trade disruptions. Crude oil and crude-linked input prices remained elevated, while supply chain disruptions and higher freight costs persisted," the company said.

"Global inflationary pressures intensified, driven by higher energy and food prices, alongside elevated sovereign bond yields and tighter financial conditions, while in India headline inflation moved up, driven by a broad-based increase across food, fuel and core components," it added.

ITC said it managed rising input costs through portfolio mix enrichment, cost-management initiatives and calibrated pricing actions. Its digital-first and organic brands, including Yogabar, 24 Mantra, Prasuma, Meatigo and Mother Sparsh, grew more than 70% year-on-year, with annual recurring revenue exceeding Rs 1,800 crore.

The cigarette segment introduced new variants and trademarks aimed at competing with smuggled brands, and noted an increase in seizures of illicit consignments. The agri business posted a 12% revenue rise, driven by value-added products and leaf-tobacco exports, though West Asia trade disruptions and lower domestic demand continued to affect leaf-tobacco sales. The paper division saw a 36% revenue jump and a 48% rise in profit before interest and tax, helped by stronger demand and pricing actions.