ITC reported a fall of more than 18% in consolidated net profit for the September quarter of FY27 on Monday, November 2, 2026, as higher taxes weighed on its cigarette business. Profit attributable to owners was ₹4,168.40 crore, down 18.7% from ₹5,126.11 crore a year earlier. Non-cigarette FMCG revenue grew 19.1% to ₹7,218.36 crore.
ITC Q2 FY27 Results at a Glance
Net revenue rose 3.9% year on year to ₹20,269 crore and 6% from ₹19,114 crore in the June quarter. Both revenue and profit were marginally above analyst estimates of ₹20,111 crore and ₹4,136 crore. On a sequential basis, profit fell 5.1% from the June quarter.
| Metric (₹ crore) | Q2 FY27 | Q2 FY26 |
|---|---|---|
| Net profit attributable to owners | 4,168.40 | 5,126.11 |
| Net revenue | 20,269 | Up 3.9% year on year |
Reports based on the exchange filing also give consolidated profit of ₹4,229.33 crore, down 18.45% from ₹5,186.55 crore, which includes profit attributable to minority holders. Gross revenue, which is reported before deducting taxes, rose 43.85%, far faster than the 3.9% rise in net revenue.
How the June Quarter and Share Price Set the Stage
In the June quarter, profit attributable to owners fell 16.2% to ₹4,394.13 crore, so the September quarter’s year-on-year decline of 18.7% was steeper. Ahead of the results, ITC shares were trading near their 52-week low.
Why Cigarette Taxes Hurt ITC’s Profit
This is the second consecutive quarter in which higher cigarette taxes have weighed on ITC’s bottom line. The changes took effect on February 1, 2026. GST on cigarettes moved from 28% of the transaction value to 40% of the retail sale price, and excise duty was raised sharply after the compensation cess was phased out.
ITC said legal industry volumes remained under pressure because of the unprecedented increase in tax. It adopted a calibrated approach to avoid a disproportionate shift in volumes to illicit trade while protecting its consumer franchise, and it re-architected its portfolio to counter global smuggled brands.
The cigarette segment’s profit before tax was ₹4,044.49 crore, down 26% from a year earlier but up 7.3% from ₹3,769.11 crore in the June quarter.
Segment Performance: FMCG, Agri and Paper Grow
Other businesses posted strong growth and offset part of the cigarette decline.
| Segment | Q2 FY27 revenue (₹ crore) | Revenue growth | Profit before tax (₹ crore) | Profit growth |
|---|---|---|---|---|
| Non-cigarette FMCG | 7,218.36 | Up 19.1% | 576.69 | Up 31.4% |
| Agri business | 4,550.60 | Up 12.7% | 518.41 | Up 14.3% |
| Paper | 3,017.45 | Up 35.9% | 273.32 | Up 50.7% |
What stood out in the segment numbers:
- Pressure point: cigarette profit before tax fell 26% on higher taxes.
- Fastest growth: paper revenue rose 35.9% and paper profit rose 50.7%.
- Consumer business: non-cigarette FMCG profit grew 31.4%, faster than its revenue growth of 19.1%.
ITC said its FMCG revenue growth was at a 14-quarter high, with biscuits, snacks, noodles, spices, salt, frozen snacks, homecare and notebooks growing more than 20%. Dairy and personal wash grew in the high teens. It was the fourth consecutive quarter of double-digit FMCG revenue growth, and the segment’s EBITDA margin widened by 50 basis points.
Agri, Paper and the Century Pulp & Paper Acquisition
The agri business continued to be affected by the West Asia conflict and delayed call-offs by customers. ITC stepped up market development to diversify into other geographies, and value-added products showed strong growth.
The paper segment sustained its recovery with improving demand and pricing actions. ITC also completed the acquisition of the Century Pulp & Paper undertaking on August 1, 2026.
Outlook and Risks Cited by ITC
ITC described the Indian economy as showing strength, backed by resilient domestic demand across rural and urban markets. It also cautioned that deficient and uneven monsoons, lower reservoir levels and strengthening El Niño conditions pose risks to agricultural output and the inflation trajectory. Geopolitical developments, climatic conditions, inflationary headwinds and consumer sentiment remain key items to watch.
What Investors Can Track After ITC’s Results
The results show a company in which a diversified set of businesses is offsetting a tax-hit core product. The items to follow include cigarette volumes under the new tax structure, the pace of non-cigarette FMCG growth and the recovery of the agri business.
Investors who want to hold ITC shares need demat account opening with a depository participant, and price moves after the results can be followed on a share market app that provides access to NSE and BSE. A strong result in some segments does not guarantee how the share price will react.
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