ITC share price in focus: Shares of ITC Ltd will be in focus after the diversified conglomerate reported its September quarter results for FY 2026-27. The company posted an 18.45 per cent YoY decline in consolidated profit to Rs 4,229.33 crore, compared with Rs 5,186.55 crore in the corresponding quarter last year.
However, revenue from operations rose 43.85 per cent YoY to Rs 30,578.4 crore in Q2 FY27, against Rs 21,255.86 crore a year ago.
ITC share price target 2026
Nuvama upgrades ITC to Buy, keeps target price at Rs 310
Nuvama has upgraded ITC’s rating to Buy from Hold while retaining its target price of Rs 310 per share. The brokerage said the Q2 performance was slightly ahead of estimates, despite pressure on the cigarette business following the increase in taxes.
According to Nuvama, cigarette volumes declined 7-8 per cent, while cigarette EBIT fell 27 per cent year-on-year. However, both metrics improved sequentially, with cigarette EBIT rising 14 per cent quarter-on-quarter.
The brokerage believes the cigarette business is nearing the bottom and expects EBIT to improve in the second half of FY27 as the company adjusts to the higher tax burden.
Nuvama also highlighted the FMCG business, which recorded 16 per cent revenue growth and 28 per cent profit growth. It noted that the business delivered its fourth consecutive quarter of double-digit growth.
Explaining its upgrade, Nuvama said the stock correction has made valuations attractive. ITC is trading at around 17 times its FY28 earnings, with a dividend yield of 5-6 per cent, according to the brokerage.
Emkay maintains Add rating, cuts target price to Rs 300
Emkay maintained its Add rating on ITC but reduced its target price by 3 per cent to Rs 300 per share.
The brokerage said the Q2 performance was slightly better than expected, with revenue around 2 per cent above estimates. However, EBITDA and profit declined 17 per cent and 18 per cent, respectively, following the excise duty increase.
Emkay noted that cigarette volumes fell around 8 per cent during the quarter. ITC did not pass on the entire tax increase to consumers to prevent smokers from shifting towards smuggled cigarettes.
The brokerage also highlighted the FMCG business, which recorded 16 per cent growth, its fastest pace in 14 quarters. Digital-first and organic brands continued to perform strongly, growing more than 70 per cent year-on-year and crossing an annual recurring revenue (ARR) of Rs 1,800 crore.
However, Emkay believes weak cigarette volumes, uncertainty around further price hikes and the upcoming Union Budget could keep the stock under pressure.
DAM Capital maintains Buy, sees target price of Rs 355
DAM Capital maintained its Buy rating on ITC with a target price of Rs 355 per share.
The brokerage said ITC’s EBITDA stood at Rs 5,160 crore, rising 14 per cent quarter-on-quarter and coming ahead of its estimates. However, it remained 18 per cent lower year-on-year.
DAM Capital estimates that around 80 per cent of the required price increase has already been implemented, with the remaining increase likely by February-March 2027. It also expects leaf tobacco costs to become more favourable.
Diversified group ITC Ltd on Monday reported an 18.45 per cent decline in its consolidated profit to Rs 4,229.33 crore for the September quarter of FY 2026-27 due to higher expenses.
It had posted a consolidated profit of Rs 5,186.55 crore in the July-September period a year ago, according to a regulatory filing by the Kolkata-headquartered company.
Its revenue from operations stood at Rs 30,578.4 crore, up 43.85 per cent in the second quarter of FY27, compared to Rs 21.255.86 crore a year ago.
ITC said in its earnings statement that it witnessed “robust growth across all Non-Cigarette Business segments”.
The FMCG business reported a fourth consecutive quarter of double-digit revenue growth, with Ebitda margin expanding 50 bps YoY amid inflationary pressures, it added.
Besides, ITC had “strong recovery momentum” in the Paper Segment, and its agri Business also delivered robust growth despite West Asia-led trade disruptions.
ITC’s total expenses stood at Rs 25,462.44 crore, up 69.6 per cent YoY in the September quarter.
Its total consolidated income, including other income, was Rs 31,085.76 crore, up 42.33 per cent in Q2 FY27.
“The operating environment continued to be characterised by heightened uncertainty amidst renewed geopolitical tensions and trade disruptions. Crude oil and crude-linked input prices remained elevated, while supply chain disruptions and higher freight costs persisted,” said ITC.
In the September quarter, ITC’s revenue from the Total FMCG business, which also includes cigarettes, climbed 51.58 per cent to Rs 23,455.47 crore.
ITC’s revenue from the cigarette business grew 72.47 per cent to Rs 16,237.11 crore.
However, “industry volumes remain under pressure due to unprecedented increase in tax”, said ITC.
Earlier this year, the government implemented a major tax hike on cigarettes and tobacco products, raising the Goods and Services Tax (GST) to a flat 40 per cent and replacing the old compensation cess with a new additional excise duty ranging from Rs 2,100 to Rs 8,500 per 1,000 sticks depending on the length.
The company focused on disciplined execution and a calibrated response to navigate the unprecedented tax increase, mitigate the risk of a disproportionate shift in volumes to illicit trade, and protect its consumer franchise while balancing the interests of all stakeholders, the company said.
Its revenue growth remained in “double digits for the fourth consecutive quarter”, while Ebitda margin expanded by 50 basis points year-on-year despite inflationary pressures.
Products such as “Biscuits, Snacks, Noodles, Spices, Salt, Frozen Snacks, Homecare and Notebooks led with 20 per cent growth, supplemented by high-teens growth in Dairy & Personal wash”, it said.
However, performance of its Atta business, mainly under Aashirvaad brand, was impacted. ITC’s revenue growth “excluding Atta stood at 23 per cent.”
Its newly acquired ’24 Mantra’ range of organic products (pulses, rice, sweeteners, spices, chikki, etc.) delivered robust growth, driven by domestic markets even as exports were impacted due to transient factors. The company’s Personal Care Products Business sustained robust growth, led by Fiama, Savlon and the ‘Nimyle’ range.
ITC’s digital-first and organic portfolio sustained its strong growth trajectory, recording year-on-year growth of over 70 per cent, with annual recurring revenue (ARR) exceeding Rs 1,800 crore.
New-generation channels delivered robust growth, driven by focused execution of channel-specific joint business plans, strategic collaborations, format-based assortments and category-specific sell-out strategies. Besides, ITC’s general trade also witnessed a strong recovery in performance.
Its revenue from the agri business dropped 12.7 per cent to Rs 4,550.6 crore, led by Value Added Products & Leaf Tobacco exports.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)