ITC Q2 Net Profit Drops to Rs 4,229.33 Cr, Revenue Up 43.85% Led by Non-Cigarette Biz

New Delhi: Diversified group ITC Ltd on Monday reported an 18.45 per cent decline in its consolidated profit to Rs 4,229.33 crore for the September quarter of FY 2026-27 due to higher expenses.

It had posted a consolidated profit of Rs 5,186.55 crore in the July-September period a year ago, according to a regulatory filing by the Kolkata-headquartered company.

Its revenue from operations stood at Rs 30,578.4 crore, up 43.85 per cent in the second quarter of FY27, compared to Rs 21.255.86 crore a year ago.

ITC said in its earnings statement that it witnessed “robust growth across all Non-Cigarette Business segments”.

The FMCG business reported a fourth consecutive quarter of double-digit revenue growth, with Ebitda margin expanding 50 bps YoY amid inflationary pressures, it added.

Besides, ITC had “strong recovery momentum” in the Paper Segment, and its agri Business also delivered robust growth despite West Asia-led trade disruptions.

ITC’s total expenses stood at Rs 25,462.44 crore, up 69.6 per cent YoY in the September quarter.

Its total consolidated income, including other income, was Rs 31,085.76 crore, up 42.33 per cent in Q2 FY27.

“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,” said ITC.

It further added that global inflationary pressures intensified, driven by higher energy and food prices, alongside elevated sovereign bond yields and tighter financial conditions.

“In India, headline inflation moved up, driven by a broad-based increase across food, fuel and core components,” the company said.

In the September quarter, ITC’s revenue from the Total FMCG business, which also includes cigarettes, climbed 51.58 per cent to Rs 23,455.47 crore.

ITC’s revenue from the cigarette business grew 72.47 per cent to Rs 16,237.11 crore.

However, “industry volumes remain under pressure due to unprecedented increase in tax”, said ITC.

Earlier this year, the government implemented a major tax hike on cigarettes and tobacco products, raising the Goods and Services Tax (GST) to a flat 40 per cent and replacing the old compensation cess with a new additional excise duty ranging from Rs 2,100 to Rs 8,500 per 1,000 sticks depending on the length.

The company focused on disciplined execution and a calibrated response to navigate the unprecedented tax increase, mitigate the risk of a disproportionate shift in volumes to illicit trade, and protect its consumer franchise while balancing the interests of all stakeholders, the company said.

ITC’s revenue from the ‘FMCG Others’ segment rose 19.13 per cent to Rs 7,218.36 crore.

Its revenue growth remained in “double digits for the fourth consecutive quarter”, while Ebitda margin expanded by 50 basis points year-on-year despite inflationary pressures.

Products such as “Biscuits, Snacks, Noodles, Spices, Salt, Frozen Snacks, Homecare and Notebooks led with 20 per cent growth, supplemented by high-teens growth in Dairy & Personal wash”, it said.

However, performance of its Atta business, mainly under Aashirvaad brand, was impacted. ITC’s revenue growth “excluding Atta stood at 23 per cent.”

Its newly acquired ‘24 Mantra’ range of organic products (pulses, rice, sweeteners, spices, chikki, etc.) delivered robust growth, driven by domestic markets even as exports were impacted due to transient factors. The company’s Personal Care Products Business sustained robust growth, led by Fiama, Savlon and the ‘Nimyle’ range.

ITC’s digital-first and organic portfolio sustained its strong growth trajectory, recording year-on-year growth of over 70 per cent, with annual recurring revenue (ARR) exceeding Rs 1,800 crore.

New-generation channels delivered robust growth, driven by focused execution of channel-specific joint business plans, strategic collaborations, format-based assortments and category-specific sell-out strategies. Besides, ITC’s general trade also witnessed a strong recovery in performance.

Its revenue from the agri business dropped 12.7 per cent to Rs 4,550.6 crore, led by Value Added Products & Leaf Tobacco exports.

During the quarter under review, the company reported a “strong growth in value-added agri portfolio (e.g. Spices, Fruits & Vegetables)”.

“Exports of Agri commodities remain impacted by West Asia conflict-led disruptions, including delayed customer call-offs, constrained availability of shipping lines and sharp escalation in ocean freight – Market development initiatives in new geographies being stepped up,” it said.

Moreover, exports of Nicotine & Nicotine derivative products (set up by the Company’s wholly owned subsidiary, ITC IndiVision ) continue to be scaled up, with the business turning PBIT positive in the last 3 quarters, it said.

ITC’s revenue from paperboards, paper & packaging increased 35.9 per cent to Rs 3,017.45 crore, delivering strong growth on the back of higher realisations and volume growth.

The segment witnessed an improvement in the demand environment, while pricing actions helped mitigate the impact of severe input cost inflation. The company continued to see strong traction in key value-added paperboard grades and exports.

Its revenue from ‘others’, which include IT services, ITC Grand Central Hotel, Mumbai and FoodTech, surged 16.5 per cent to Rs 1,449.87 crore.

Over the outlook, ITC said despite these pressures, the Indian economy continued to demonstrate strength, underpinned by resilient domestic demand across rural and urban markets.

“However, deficient and uneven monsoons and lower reservoir levels, alongside strengthening El Nino conditions, pose risks to agricultural output and the inflation trajectory. Geopolitical developments, climatic conditions, inflationary headwinds and consumer sentiment would remain key monitorables,” it said.

Share of ITC Ltd on Monday settled 0.15 per cent higher at Rs 266 apiece on the BSE.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)