ITC stock balances cigarette tax pressure with FMCG momentum
Published on 11/06/2026 at 10:40 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSKey earnings takeaways
- ITC's consolidated profit attributable to owners fell 18.7 percent in the second quarter of fiscal 2027.
- Non-cigarette FMCG and paper businesses provided operating support as cigarette taxes pressured profitability.
- Higher excise duty lifted reported revenue, while geopolitical and supply-chain risks remain relevant for investors.
ITC reported a sharp profit decline for the second quarter of fiscal 2027 as higher cigarette taxes weighed on its core tobacco business. Fortune India reported the results on Monday, November 2, 2026.
Cigarette taxes weigh on earnings
Consolidated profit attributable to owners of the parent fell 18.7 percent year over year to INR 4,168.40 crore in the quarter, compared with INR 5,126.11 crore a year earlier. Consolidated EBITDA declined 15.7 percent to INR 5,644.83 crore, while the EBITDA margin narrowed to 27.9 percent from 34.3 percent.
Revenue from operations increased 43.9 percent to INR 30,578.40 crore. The headline growth was heavily influenced by higher excise duty on cigarettes; excluding excise duty, revenue rose 3.9 percent to INR 20,268.63 crore. ITC said the cigarette industry continued to face pressure from higher taxes and strained legal-market volumes.
FMCG and paper provide support
Non-cigarette FMCG categories continued to grow, with biscuits, snacks, noodles, spices, salt, frozen snacks, homecare and notebooks each recording growth of more than 20 percent. Dairy and personal wash delivered high-teen growth, according to the report.
The paperboards, paper and packaging segment also improved. Revenue rose 36 percent year over year and segment profit before interest and tax increased 48 percent. ITC completed its acquisition of Century Pulp and Paper on August 1, 2026, adding scale to the recovering paper business.
Agricultural operations recorded 12 percent revenue growth, led by value-added products and leaf-tobacco exports. However, West Asia-related trade disruptions affected exports through delayed customer call-offs, limited shipping availability and higher freight costs.
Risks remain beyond tobacco
ITC said the operating environment remained uncertain because of geopolitical tensions, elevated crude oil and input costs, supply-chain disruption and higher freight expenses. The company also cited uneven monsoon conditions and strengthening El Nino conditions as risks for agricultural output and inflation.
For investors, the results underline the changing earnings mix: consumer-goods and paper growth are cushioning the cigarette business, but they have not yet fully neutralized tax-driven pressure on group profitability.
Broader market context is available through the Indian market coverage.
More news and analyses on ITC stock are available in the company topic section.
ITC Limited at a glance
- Company: ITC Limited
- ISIN: INE154A01025
- Reporting period: Second quarter of fiscal 2027
- Consolidated profit: INR 4,168.40 crore, down 18.7 percent year over year
- Revenue from operations: INR 30,578.40 crore, up 43.9 percent year over year
