ITC is scheduled to announce its Q2FY26 results on October 30. All eyes are on the Q2 performance, especially after the GST new rates and its potential impact on sales. The FMCG results out so far have indicated mixed trend. While consumption has seen some boost but the timing an implementation of new rates has also created some near-term trend disruption. Moreover, the higher GST on tobacco is also a key monitorable.
Here is a quick look at the key factors to watch out for the FMCG major ahead of Q2 results-
1. Demand outlook
2. RM trends
3. Agri business outlook
4. Competitive intensity
5. Paper business
ITC Q2 FY26 preview: Axis Direct says 6% revenue growth likely
Axis Direct expects 6% revenue growth for ITC, driven by growth across key segments — cigarettes, FMCG, and agri — while the paper segment is likely to remain weak.
“We expect cigarettes to grow 7% YoY (6% volume), FMCG to grow 5% YoY, and agri to grow 10%, whereas the paper segment continues to remain weak and is expected to grow 4% YoY on account of weak demand conditions due to cheap Chinese supplies,” Axis Direct noted.
ITC Q2 FY26 preview: Kotak says cigarette business to grow 6–7%
Kotak Institutional Equities expects ITC’s cigarette business to remain steady and resilient, with volume and gross sales growth estimated at 6% and 7% year-on-year (YoY), respectively, against 6.5% and 7.5% in Q1FY26.
Cigarette EBIT growth is projected at around 3.5% YoY, with the EBIT margin expected to decline by ~200 basis points (bps) YoY and ~100 bps quarter-on-quarter (QoQ) due to the consumption of high-cost leaf tobacco and other inputs.
“Leaf tobacco prices have moderated in the recent quarters but benefits will be accrued from 2H onwards,” said Kotak Institutional Equities.
ITC Q2 FY26 preview: Kotak expects FMCG segment to see 4% revenue growth
In the FMCG segment, Kotak estimates approximately 4% YoY revenue growth, factoring in a 300–350 bps impact from channel destocking in nearly 75% of the FMCG portfolio (including noodles, biscuits, snacks, etc).
The analyst expect EBIT margin for the FMCG segment at approximately 7.5%, up 60 bps QoQ, as raw material inflation in key commodities such as edible oil, wheat, and potato moderated sequentially.
ITC Q2 FY26 preview: How will agri and paperboard business pan out?
The Agri business is expected to post 10% YoY growth with an EBIT margin of 7.5%, while the Paperboards segment is likely to remain subdued with approximately 5% YoY growth amid tough operating conditions — including subdued domestic demand, weak export markets, cheaper Chinese supplies, and the impact of GST transition. EBIT margin for this segment is estimated at approximately 8.5%, compared to 7.7% in 1QFY26.
“Net-net, adjusted for the demerger of Hotels business, ITC’s LFL gross sales/EBITDA growth are expected to be approximately 6.5%/6% yoy.”