ITC Q1 PAT declines 22% YoY

ITC reported weaker Q1 FY27 earnings as record taxation on cigarettes weighed on its core cash-generating business, while the ongoing conflict in West Asia weighed on agri business exports.

The company's consolidated profit after tax before exceptional income stood at Rs 4,082.32 crore in Q1 FY27, down 22.16% YoY.

The company reported an exceptional gain of Rs 406 crore following the acquisition of control in Sproutlife Foods with effect from 1 April 2026. The gain arose from remeasuring ITC's existing stake in Sproutlife at fair value under Ind AS 103 (Business Combinations). Following the acquisition, Sproutlife's assets, liabilities and financial performance have been consolidated into the FMCG-Others segment from 1 April 2026, making the segment's results not directly comparable with previous periods.

 

Net sales declined 11.1% YoY to Rs 19,000.89 crore in the quarter ended 30 June 2026. Gross revenue, however, increased 27.8% YoY to Rs 29,409.82 crore.

Profit before tax stood at Rs 5,860.85 crore in Q1 FY27, down 17.8% YoY, while EBITDA declined 24.0% YoY to Rs 5,181 crore.

On the cost front, total expenditure declined 5.1% YoY to Rs 13,933.51 crore. Raw material consumption increased 11.9% YoY to Rs 6,982.15 crore, employee benefit expenses rose 12.0% YoY to Rs 1,877.01 crore, finance costs surged 141.5% YoY to Rs 39.78 crore, while depreciation increased 1.1% YoY to Rs 427.73 crore.

ITC said group entities, including ITC Infotech, SNPL, Sproutlife and ITC Hotels, delivered strong performance during the quarter.

In the cigarettes business, the company continued its calibrated response to the sharp excise duty increase implemented from February following the expiry of the GST compensation cess. Cigarettes segment PBIT declined 35% YoY to Rs 3,341 crore. Revenue surged to Rs 15,383 crore from Rs 8,520 crore, although the company said the figures are not comparable due to changes in accounting following the revised tax structure. ITC said it rolled out more than 30 portfolio interventions across brands, segments and price points, while staggered pricing actions and agile execution helped mitigate migration to illicit trade and protect its consumer franchise.

The FMCG-Others business reported revenue of Rs 6,482 crore, up 12% YoY, led by strong growth in dairy, snacks, noodles, frozen snacks and personal care products. The notebooks business rebounded during the quarter. However, the company said the atta business was impacted by transient factors, including the heatwave, LPG shortages and benign wheat prices.

The Agri Business reported revenue of Rs 8,082 crore, down 17% YoY. The company said underlying revenue grew around 9% after adjusting for the timing of wheat procurement and disruptions arising from the conflict in West Asia. Growth in the value-added agri products portfolio was led by spices and fruits & vegetables.

Revenue from the Paperboards, Paper & Packaging business increased 9% YoY to Rs 2,307 crore, supported by higher sales of value-added paperboards and packaging, improved net realisations and robust export growth.

Looking ahead, ITC said the operating environment remains uncertain due to the ongoing conflict in West Asia, which has triggered volatility in crude oil prices and disrupted global trade and supply chains. While rural and urban consumption remained resilient, the company flagged imported inflation, a deficient monsoon, lower kharif sowing and the risk of El Ni-related weather disruptions as key near-term risks. It added that India's strong macroeconomic fundamentals, supported by sustained public capital expenditure, stable monetary conditions and government policy measures, continue to provide a favourable backdrop for long-term growth.

ITC is one of India's largest diversified conglomerates with businesses spanning FMCG, cigarettes, hotels, paperboards and packaging, agri business and information technology.

ITC shares fell 1.42% to settle at Rs 281 on Friday, 31 July 2026.

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