ITC stock turns to premium FMCG as cigarette profits stay under pressure

ITC is broadening its growth engine beyond cigarettes as higher taxation continues to weigh on volumes and profitability. An analysis by The Economic Times, last updated on November 5, 2026, identifies premiumisation, wider distribution and digital-first brands as central to the company's next phase.

FMCG becomes a larger growth pillar

ITC's FMCG-others business recorded its strongest revenue growth in 14 quarters in the September quarter, according to the analysis. Foods, biscuits, snacks, dairy, personal care, notebooks and home-care products led demand, while an improved product mix and cost controls supported margin expansion despite input-cost pressure.

Digital-first brands Yoga Bar, Prasuma and Mother Sparsh recorded 70% year-on-year growth and exceeded a combined annual revenue run rate of INR 1,800 crore. The figures underline the role of newer brands in expanding ITC's consumer portfolio and reducing reliance on its traditional tobacco business.

Cigarette pressure remains the main risk

Higher cigarette taxes continue to pressure volumes and profitability, leaving the tobacco division as the principal earnings risk. Commodity inflation and geopolitical uncertainty add to the operating challenges, while a recovery in paperboards and stronger demand for value-added agricultural products provide partial offsets.

For investors, the key question is whether premium FMCG, fresh foods and digital brands can deliver sustained growth quickly enough to counter weaker cigarette economics. The next results and updates on pricing, volumes and margins should provide the clearest signals on that balance.

Broader market developments remain relevant for investors; see Current market reports.

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