ITC's healthy core business signals rerating scope amid weak Q2 agri show

ITC's cigarette and FMCG segments delivered steady performance in Q2 FY26 despite a slump in agri sales; analysts see scope for a valuation re-rating as core margins improve

ITC delivered a healthy performance in core segments in the second quarter of financial year 2026 (Q2FY26) with sequential improvement in margins, though the year-on-year (Y-o-Y) performance remained under pressure.

 

Consolidated gross cigarette sales grew 6 per cent Y-o-Y and volume growth was also 6 per cent. Cigarette EBIT (earnings before interest and tax) was up 4.2 per cent Y-o-Y, but EBIT margin contracted 100 basis point (bp) on year to 58 per cent due to higher leaf tobacco prices.

 

The consolidated FMCG segment sales grew 8.5 per cent Y-o-Y. Notebooks continued to do badly but staple products have seen