Cigarette-to-FMCG major ITC reported a 3% year-on-year (y-o-y) increase in consolidated net profit (attributable to owners of the company) to Rs 5,244 crore in the June quarter (Q1FY26), led mainly by its cigarettes and agri businesses. The Q1 profit number was in line with Street estimates of Rs 5,114 crore for the period.
The company reported consolidated gross revenue of Rs 23,129 crore for Q1, marking a sharp 19.5% rise compared to Rs 19,350 crore reported a year ago. Revenue net of excise was Rs 21,495 crore, higher than the Bloomberg consensus estimate of Rs 18,754 crore. Cigarettes contribute 41% to ITC’s topline, while the non-cigarette FMCG business contributes 25% to turnover, according to sector analysts.
Sequentially, gross revenue of Rs 20,376 crore was up by 13.5%. The profit in the previous quarter was Rs 19,727 crore, which included an exceptional gain from an accounting entry related to the demerger of its hotels business, effective January 1, 2025.
Digital-first FMCG and restructuring updates
ITC also approved the amalgamation of its wholly-owned subsidiaries, Sresta Natural Bioproducts (SNBPL) and Wimco, with itself. The effective dates for the amalgamation are June 13, 2025, for SNBPL and April 1, 2025, for Wimco, subject to regulatory approvals, it said. Aimed at integrating SNBPL’s 24 Mantra Organic brand into ITC to leverage its strength in FMCG, ITC said its digital-first and organic portfolio, which includes brands like Yogabar, Mother Sparsh, Prasuma, Meatigo, as well as 24 Mantra had reached an annual revenue run rate of Rs 1,000 crore in Q1.
Earnings before interest tax depreciation and amortisation (Ebitda) rose 4.2% y-o-y to Rs 6,816 crore, marginally ahead of Bloomberg consensus estimates of Rs 6,548 crore for the period. Sequentially, Ebitda was up 4.6%. But Ebitda margins declined 430 basis points to 29.5% in Q1 from 33.8% reported last year.
ITC described its Q1 performance as “resilient” amid a challenging operating environment. Group companies, including ITC Infotech, Surya Nepal, and ITC Hotels, also contributed to the consolidated performance, it said.
“Rural demand showed resilience, and early signs of recovery in urban consumption demand were visible during the quarter, ” ITC said.
Segment-wise performance
The cigarette segment led the performance with an 8.04% y-o-y revenue growth, reaching Rs 9,553.86 crore in Q1. Pre-tax profits from the segment stood at Rs 5,498.93 crore, a 4.64% increase compared to the same period last year.
The company stated that consumption of high-cost leaf inventory weighed on margins, which was partly mitigated through product-mix enrichment and cost management interventions.
Revenue from the non-cigarette FMCG segment in Q1 stood at Rs 5,800.44 crore, a 5.5% y-o-y increase. Pre-tax profit for this segment was Rs 399.03 crore, down by 16.7%, as elevated prices of major commodities (such as edible oil, wheat, maida, cocoa, soap, and noodles) impacted margins. The company also noted that the notebooks industry continued to operate under deflationary conditions due to low-priced paper imports and opportunistic plays by local/regional players.
The agri business segment was driven by trading opportunities in bulk commodities and exports of leaf tobacco. Segment revenue for the quarter was Rs 9,723.84 crore, up 38.95% y-o-y. Pre-tax profit in the segment stood at Rs 434.67 crore, an increase of 26.13% y-o-y.
The operating environment remained challenging for the paperboards, paper, and packaging segment, with a sustained influx of low-priced supplies into global markets, including India, elevated domestic wood prices, and subdued realisations. Revenue from this segment was Rs 2,116.62 crore in Q1, an increase of 7.07%. However, pre-tax profit of Rs 151.40 crore was down by 41%.