Diversified conglomerate ITC Ltd announced its financial results for the July–September quarter of FY26 on October 30, 2025, reporting a 4% year-on-year (YoY) rise in consolidated net profit to ₹5,187 crore. However, total revenue declined by 1% YoY to ₹21,256 crore, reflecting the impact of operational challenges and subdued demand in certain business segments.
FMCG Segment Continues Growth Momentum
The FMCG Sector – Others division maintained its upward trajectory, achieving 8% YoY growth (excluding notebooks) despite disruptions caused by heavy rains and the transition to a new GST regime.
Growth was primarily driven by the staples, dairy, premium personal wash, and agarbatti categories, while premium and NewGen portfolios continued to perform strongly.
The company reduced GST rates across more than half of its FMCG portfolio, passing the benefits directly to consumers. The segment’s EBITDA margin improved by 50 basis points quarter-on-quarter, supported by effective revenue management, price-volume balancing, and cost optimisation. Commodity prices remained high but stable, with the segment’s EBITDA margin recorded at 10%, compared with 10.6% in Q2 FY25.
Additionally, ITC’s Digital-first and Organic portfolio performed well, achieving an annual recurring revenue (ARR) of ₹1,100 crore.
Cigarettes Segment Strengthens Market Leadership
Revenue from ITC’s Cigarettes segment rose 6–7% YoY, reaching approximately ₹9,414 crore. The growth was driven by sustained demand in differentiated and premium offerings, along with strategic initiatives in competitive markets aimed at countering illicit trade.
Leaf tobacco costs remained elevated; however, procurement prices moderated in the current crop cycle. The company credited its strong performance to portfolio innovation and targeted market interventions that reinforced its leadership position in the category.
Agri Business and Paperboards Performance
The Agri Business segment’s quarterly performance was impacted by timing differences and a high base effect. However, for the first half of FY26, segment revenue grew 7% and segment results increased 10%, supported by ITC’s expertise in crop development and its high-quality sourcing standards.
Value-added agri exports were muted due to delayed customer orders and global trade uncertainties, particularly concerning U.S. tariffs.
The Paperboards and Packaging division delivered a 5% YoY revenue increase and a 17% sequential rise in profit, with margins improving by 90 basis points quarter-on-quarter. Although the broader industry continues to face challenges from low-priced imports and high wood costs, ITC reported early signs of moderation in wood prices.
Government interventions—such as the Minimum Import Price (MIP) imposed on Virgin Multi-layer Paperboard and anti-dumping investigations on imports from China, Chile, and Indonesia—are expected to stabilise the segment further. The company continues to strengthen its wood sourcing ecosystem through accelerated plantations, regional expansion, and satellite-based monitoring.
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Outlook
Despite facing sectoral headwinds, ITC’s diversified portfolio and strategic initiatives helped it deliver resilient results in Q2 FY26. Its focus on premiumisation, digital integration, and cost efficiency continues to drive profitability and support long-term growth across core business segments.
With improving rural demand and stable commodity prices, ITC remains well-positioned to sustain its growth trajectory and reinforce its leadership across India’s FMCG and tobacco markets.
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