New Delhi, November 3, 2026: ITC Ltd reported a 20.1% year-on-year decline in standalone net profit to ₹4,137.1 crore for the quarter ended September 30, as higher cigarette taxes, weaker volumes and rising input costs weighed on profitability. Revenue, however, rose sharply during the quarter.
Standalone Profit Drops to ₹4,137 Crore
ITC’s standalone profit fell from about ₹5,175.7 crore a year earlier to ₹4,137.1 crore in Q2 FY27.
On a consolidated basis, net profit was about ₹4,229 crore, down roughly 18.5% from the same quarter last year.
Cigarette Taxes Hit Core Earnings
The cigarette business, which remains ITC’s largest earnings contributor, faced significant pressure after an increase in taxation led to higher retail prices and weaker legal-industry volumes.
Profit from the cigarette segment fell by more than a quarter during the quarter.
Revenue Rises Sharply
ITC’s reported standalone revenue from operations increased to around ₹28,318 crore, up about 46% year-on-year.
The sharp headline increase was partly due to the accounting impact of higher excise duty on cigarettes. After adjusting for excise duty, underlying revenue growth was much more moderate.
Margins Come Under Pressure
Higher taxes and raw-material costs compressed profitability.
At the consolidated level, EBITDA fell around 15.7% to ₹5,645 crore, while operating margins weakened compared with the year-ago period.
Non-Cigarette FMCG Business Shows Strong Growth
ITC’s non-cigarette FMCG business provided a bright spot, recording its strongest revenue growth in 14 quarters.
Demand remained healthy across packaged-food and consumer brands, helping offset some of the weakness in cigarettes.
Agri and Paper Businesses Expand
ITC’s agriculture business also reported higher revenue and profit during the quarter.
Its paperboards, paper and packaging business posted strong growth as well, helped partly by the inclusion of Century Pulp and Paper following its acquisition.
Company Flags Inflation Risks
ITC said consumer demand remained relatively resilient across rural and urban markets.
However, the company cautioned that uneven monsoon conditions and strengthening El Niño trends could affect agricultural output and create additional inflationary pressure.
Investors Watch Cigarette Recovery
The key issue for investors now is whether cigarette volumes recover as consumers adjust to higher prices.
Continued momentum in FMCG, agriculture and paper businesses could provide some support, but taxation and input-cost pressures are likely to remain important factors for ITC’s earnings outlook.
Source: Reuters, The Economic Times, Financial Express
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