ITC reports 18.5% drop in Q2 profit as cigarette earnings fall, FMCG and paper segments grow

ITC Ltd said its consolidated net profit for the September quarter of FY27 fell 18.5% to Rs 4,229 crore, down from Rs 5,187 crore a year earlier. Net revenue increased 5% to Rs 20,454 crore, and EBITDA declined 15.7% to Rs 5,645 crore.

The cigarette segment remained the biggest drag, with profit dropping 27.2% to Rs 3,813 crore and net revenue falling 21% year-on-year. The company attributed the weakness to an unprecedented rise in cigarette taxes, which reduced legal industry volumes. Gross cigarette revenue rose 78.1% to Rs 15,536 crore, reflecting the tax impact on sales figures.

ITC highlighted that its non-cigarette FMCG business delivered its strongest revenue growth in 14 quarters, with the FMCG-Others segment posting a 19% increase in revenue and a 27.8% rise in profit. Revenue from biscuits, snacks, noodles, spices, frozen snacks, home-care products and notebooks grew over 20%, while dairy and personal wash items grew in the high teens. The segment's EBITDA margin improved by more than 50 basis points.

The paperboards, paper and packaging segment saw revenue jump 35.9% to Rs 3,016 crore and profit rise 47.6% to Rs 282 crore, aided by the recent acquisition of Century Pulp and Paper. Excluding the acquisition, revenue grew 10% and profit increased 52%, with the profit margin expanding by 320 basis points.

Agriculture revenue grew 12% to Rs 4,452 crore, driven by value-added products and leaf-tobacco exports, while segment profit rose 11.2% to Rs 511 crore. The company noted that trade disruptions linked to the West Asia conflict and delayed orders continued to affect agricultural exports.