The FMCG giant ITC share price rises 1.4% to 424.60 as the company reported its quarterly earnings for Q2FY26. ITC’s revenue decreased by 3.4% YoY, which came below estimates, while EBITDA rose 2.1% YoY, in line with estimates.
Nuvama on ITC: Agri business a drag
Nuvama Institutional Equities slashed the target price on ITC to Rs 534 from Rs 540, while maintaining its ‘Buy’ rating. ITC’s revenue decreased by 3.4% YoY, which came below estimates, while EBITDA rose 2.1% YoY, in line with estimates. The brokerage said that the company reported a weak set of numbers this quarter.
The miss on revenue can be attributed to a drag in the Agri business, which was down 31% YoY, due to a high base with value-added Agri exports hurt by delayed customer call-offs and uncertain US tariffs (ex-Agri gross revenue grew 7% YoY, led by growth in the cigarette and FMCG segment).
ITC’s agri business declined 31% YoY owing to timing differences and a high base, with value-added agri exports affected by delayed call-offs and uncertainty around US tariffs. The paper segment remained under pressure due to low-priced supplies and elevated wood prices.
Nuvama on ITC: Cigarette volume grew in line
ITC’s cigarette volume grew 6% YoY, which was in line with the brokerage’s expectations due to strong performance in differentiated and premium offerings. However, the competitor, Philip Morris, mentioned that industry volume in India’s cigarette market grew 9.1% YoY (10.5% in Q1 FY26).
“We reckon Godfrey Phillips India cigarette volumes shall be lower (likely 20–25%) in Q2 FY26 due to likely lower growth in its several domestic-owned brands such as Four Square, Stellar, Red and White, etc. As expected, Marlboro (part of Godfrey Phillips) continues to grow much faster than ITC and the industry due to higher trade commission and aggressive pricing. However, ITC is a much larger player with 75% market share,” said Nuvama.
ITC Q2 FY26 results
ITC posted a consolidated net profit of Rs 5,186.55 crore for the second quarter of the current financial year, an increase of 4.1% year-over-year.
The company’s revenue from core operations declined by over a per cent to Rs 21,255.86 crore in the second quarter of the current financial year. The company reported Rs 21,536.38 crore in revenue from operations in Q2 FY25.
ITC stock performance
The share price of ITC has risen 1.2% in the last five trading sessions. The stock has given a return of 4.4% in the past one month. However, the stock has declined 1.5% in the last six months and almost 15% in the previous one year.