ITC’s cigarette profit slumps 35% in Q1, while FMCG and packaging cushion the hit
February tax increases drove a sharp decline in ITC’s cigarette profitability, though volume erosion was limited. FMCG revenue rose 12% and its EBIT increased 20%, while digital-first and organic brands reached a ₹1,500 crore annual revenue run rate. Brokerages see cigarette-margin pressure easing through FY27.
ITC’s cigarette profitability was hit by February tax increases, but lower-than-feared volume erosion and staggered price hikes suggest recovery. FMCG, digital-first brands and packaging performed strongly, while agri weakened. Brokerages expect easing cigarette-margin pressure through FY27.
Why this matters
The result follows ITC’s Q1 rally, which weighed FMCG risks against consumption upside, and a prior quarter when revenue rose 28% while profit fell 27%; HUL’s Q1 growth also outpaced ITC’s.
Retail-company signals are accelerating, up 227,483% QoQ.