ITC stock faces cigarette-tax pressure as FMCG growth accelerates
Published on 11/09/2026 at 10:50 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSITC balances tax pressure with FMCG growth
- Higher cigarette taxes reduced ITC's consolidated profit in the September quarter.
- Non-cigarette FMCG delivered its strongest revenue growth in 14 quarters.
- Paper and agriculture also contributed to the broader earnings mix.
ITC reported a sharp earnings split in the September quarter of fiscal 2026-27: higher cigarette taxes weakened profitability, while its consumer-goods businesses expanded. Business Standard reported on Monday, November 2, that consolidated net profit attributable to owners fell 18.7 percent year on year to INR 4,168.40 crore.
Consolidated net revenue rose 3.9 percent to INR 20,269 crore. The result came after cigarette taxes increased from February 1, 2026, including a rise in GST from 28 percent of transaction value to 40 percent of retail sale price and a sharp increase in excise duty.
Cigarette taxes weigh on earnings
ITC said legal industry volumes remained under pressure after the tax changes. Cigarette segment pre-tax profit declined 26 percent year on year to INR 4,044.49 crore, although it increased 7.3 percent sequentially from the June quarter.
The company said it was using pricing, portfolio changes and other measures to protect its consumer franchise and limit the risk of a disproportionate shift toward illicit trade. For investors, the cigarette business remains the main near-term pressure point because it continues to contribute significant earnings despite weaker profitability.
FMCG growth broadens the mix
Non-cigarette FMCG revenue increased 19.1 percent to INR 7,218.36 crore, which ITC described as its strongest growth in 14 quarters. Biscuits, snacks, noodles, spices, salt, frozen snacks, homecare and notebooks each recorded growth of more than 20 percent, while dairy and personal wash delivered high-teens growth.
Pre-tax profit in non-cigarette FMCG rose 31.4 percent to INR 576.69 crore. The paper business also gained momentum, with revenue up 35.9 percent and pre-tax profit up 50.7 percent. Agriculture revenue increased 12.7 percent, while its pre-tax profit rose 14.3 percent.
ITC earnings at a glance
- Company: ITC Limited
- ISIN: INE154A01025
- Reporting period: Second quarter of fiscal 2026-27
- Consolidated net profit attributable to owners: INR 4,168.40 crore, down 18.7 percent year on year
- Consolidated net revenue: INR 20,269 crore, up 3.9 percent year on year
- Non-cigarette FMCG revenue: INR 7,218.36 crore, up 19.1 percent year on year
Indian equities remain an important backdrop for ITC investors; see the BSE Sensex for the broader market context.
More news and analyses are available on ITC stock.
