ITC Q2 preview: Analysts see steady cigarette growth; FMCG margins soft

ITC Q2 results preview: Brokerages tracked by Business Standard estimate ITC's net profit to increase 3 per cent year-on-year (Y-o-Y) on average, to ₹5,153.9 crore as compared to ₹5,005.3 crore

ITC Q2 results preview: Fast-moving consumer goods (FMCG) major ITC is slated to release its second quarter (Q2FY26) results on Thursday, October 30, 2025.

ITC Q2 results 2025: Profit estimates

Brokerages tracked by Business Standard estimate ITC's net profit to increase 3 per cent year-on-year (Y-o-Y) on average, to ₹5,153.9 crore as compared to ₹5,005.3 crore. Sequentially, the net profit is expected to rise 5 per cent from ₹4,912.4 crore in Q1FY26.

ITC Q2 results 2025: Revenue expectations

The company's revenue for the quarter under review is expected to rise marginally by 0.39 per cent in Q2FY26, on average, to ₹19,826.9 crore as compared to ₹19,749.9 crore a year ago. On a quarter-on-quarter (Q-o-Q) basis, the revenue is poised to climb 1 per cent from ₹19,616.68 crore in Q1FY26.  ALSO READ | PB Fintech Q2 preview: PAT may rise 145% YoY, rev 48%; GST impact in focus

 

How will ITC perform in Q2FY26?

Kotak Institutional Equities: 

Cigarette: The brokerage expects volumes and gross sales to grow steadily by 6 per cent and 7 per cent Y-o-Y, respectively. Cigarette earnings before interest and tax (Ebit) is estimated to rise 3.5 per cent Y-o-Y, with Ebit margins declining 200 basis points (bps) Y-o-Y and 100 bps Q-o-Q due to consumption of high-cost leaf tobacco and other inputs. While leaf tobacco prices have eased in recent quarters, margin benefits should accrue from the second half (H2) onward.

 

FMCG: Revenue growth is forecasted at 4 per cent Y-o-Y to ₹19,903.7 crore, reflecting a 300–350 bps drag from channel destocking across roughly 75 per cent of the portfolio (noodles, biscuits, snacks, etc.). Ebit margin is seen at 7.5 per cent, up 60 bps Q-o-Q, aided by moderating input inflation (edible oil, wheat, potato).

 

Agri business growth/Ebit margin is expected at 10 per cent and 7.5 per cent Y-o-Y, respectively.  

 

Paperboard business: 5 per cent Y-o-Y growth is expected amid soft domestic demand, weak exports, lower realisations, Chinese supply pressure, and goods and services tax (GST) transition impact. Ebit margin is estimated at 8.5 per cent, as against 7.7 per cent in Q1FY26.

 

Net-net, adjusting for the demerger of the hotels business, ITC’s like-for-like (LFL) gross sales and earnings before interest, tax, depreciation and amortisation (Ebitda) growth are expected at 6.5 per cent and 6 per cent Y-o-Y, respectively.

Motilal Oswal Financial Services: 

Cigarette: Analysts expect the cigarette business to post stable volumes and pricing, with portfolio growth aided by a richer product mix. They model 6 per cent volume growth in Q2FY26 and 7.5 per cent Y-o-Y sales growth. Cigarette earnings before interest and tax (Ebit) is expected to rise 5 per cent Y-o-Y, though margins may contract by 100 basis points (bps) due to higher leaf tobacco prices.

 

FMCG: The brokerage forecasts 5.5 per cent Y-o-Y sales growth but a 9 per cent decline in Ebit, with a 100 bps margin contraction as price hikes lag raw material inflation. 

 

Paperboard: Overall growth is likely to remain weak amid an influx of cheaper Chinese paper, while the agriculture segment is expected to have performed well in the quarter.  ALSO READ | TVS Motor Q2 preview: PAT may zoom upto 45% YoY; other key estimates inside

Emkay Global Financial: 

Cigarette: The brokerage anticipates volume growth of 6 per cent amid a relatively better demand environment. Price growth is likely to be around 1 per cent, aided by mix. Ebit margin is likely to be 71 per cent, flat Q-o-Q, with a moderate 100 bps contraction Y-o-Y. Benefits from lower-cost leaf tobacco should start to flow from the next quarter.

 

FMCG: Revenue is likely to grow 6.5 per cent, supported by the inorganic contribution from 24 Mantra. Segment Ebitda margin is likely to remain under pressure, contracting 95 bps Y-o-Y to 9.7 per cent, with Ebitda down 3 per cent Y-o-Y.

 

Agri: On a high base (up 47 per cent in Q2FY25), revenue is likely to decline 10 per cent. Ebitda margin is forecasted to be stable at about 8 per cent, with Ebit down 7 per cent Y-o-Y.

 

Paperboards: Revenue is expected to grow 8 per cent. On profitability, anti-dumping duty should help contain some margin stress. A sequential recovery in Ebit margin of around 110 bps to 8.8 per cent is expected, though down 270 bps Y-o-Y.

 

Overall, 1 per cent revenue growth is expected to ₹18,756.2 crore in Q2, Ebitda growth is anticipated around 5 per cent to ₹6,405.5 crore, and earnings growth is likely by 4 per cent.

Nuvama Institutional Equities: 

Cigarette: The brokerage expects cigarette volumes to increase 5–6 per cent Y-o-Y on a base of 3.3 per cent growth in Q2FY26. Cigarette net revenue and Ebit are anticipated to grow 7.1 per cent and 3 per cent Y-o-Y, respectively. Consolidated revenue is likely to rise 1.7 per cent Y-o-Y to ₹18,957.9 crore in Q2FY26.

 

FMCG: Margins are forecast to improve Q-o-Q in Q2. FMCG sales are seen up 6 per cent Y-o-Y, but Ebit is likely to decline 4 per cent Y-o-Y.

 

Agri: Sales are likely to decline 8 per cent Y-o-Y due to a high base (with coffee and spices performing well). Agri profit is expected to fall 47 per cent Y-o-Y. 

 

Paperboards: Sales growth may be 7 per cent Y-o-Y, but profits could drop 27 per cent Y-o-Y owing to intense import competition and limited operating leverage; earnings before interest, tax, depreciation and amortisation (Ebitda) is likely to decline 0.6 per cent Y-o-Y.

 

GST impact: Channel partners may have aggressively destocked before 22 September 2025 to avoid losses on inventory purchased at higher goods and services tax (GST) rates. Consequently, analysts expect some pull-down in secondary sales in September for ITC due to destocking.