ITC share price slips 2%, hits 52-week low; what's making Street nervous?

Retail individual shareholders increased their holdings in ITC for the sixth straight quarter to 13.94% as of June 2026, data shows.

ITC share price movement

 

Share price of ITC hit a 52-week low at ₹273.05, falling 2 per cent on the BSE in Monday’s intra-day trade. The stock price of the diversified fast moving consumer goods (FMCG) company fell below its previous low of ₹275 touched on June 4, 2026. 

Thus far in the calendar year 2026, ITC underperformed the market by falling 25 per cent, compared to a 9 per cent decline in the BSE Sensex and 8 per cent fall in the BSE FMCG index.

 

At 12:28 PM, ITC quoted 1.4 per cent lower at ₹273.60, against a 0.43 per cent decline in the BSE Sensex and 0.20 per cent fall in the BSE FMCG index. A combined 6.9 million equity shares changed hands on the NSE and BSE.  

 

 

FPIs reduce stake in ITC for fourth straight quarter

 

Foreign portfolio investors (FPIs) reduced their stake in ITC for the fourth straight quarter. FPIs' holding in ITC declined to 11.3 per cent in the June 2026 quarter from 11.92  per cent at the end of the March 2026 quarter. At the end of the June 2025 quarter, FPIs held a 15.04 per cent stake in ITC, cut their stake to 14.47  per cent in the September 2025 quarter and further to 13.2  per cent at the end of the December 2025 quarter, the CapitalinePlus data shows.

 

However, retail individual shareholders increased their holdings in ITC for the sixth straight quarter. They hiked their stake in ITC to 13.94% in the June 2026 quarter from 13.33 per cent at the end of the March 2026 quarter. Retail individual shareholders held a 12.39 per cent stake in ITC at the end of December 2024 quarter, data shows.  CHECK Stock Market LIVE Updates 

Why is ITC underperforming the market?

 

On July 31, 2026, while announcing the June 2026 quarter (Q1FY27) earnings, ITC said the quarter was marked by heightened uncertainty in the operating environment due to the ongoing conflict in West Asia, which triggered sharp increase & volatility in the price of crude oil & crude-linked products along with significant trade & supply chain disruptions.

 

The management expects domestic real GDP growth of 6.4 per cent in FY27. Key items to watch are monsoon distribution, with a 15 per cent deficit versus long period average (LPA) as of late July 2026, El Nino conditions, and crude-linked input cost inflation due to West Asia crisis. Crude palm oil, fuel and packaging inputs have become costlier. 

 

Analysts at ICICI Securities in the Q1 result update said, they think ITC’s inventory cover, commodity hedges, and pricing actions should help reduce some margin pressure in FMCG-Others. Management sounded cautious on cigarette volume growth, while continuing to build FMCG-others, value-added agri, and fresh food cloud kitchens. The brokerage firm cut its EPS estimate for FY27/FY28 by 9.3 per cent/8.9 per cent.

 

Profitability in cigarettes remained soft due to the absorption of higher excise duty rates and lower realisations, but this was partly offset by improving trends in FMCG, where earnings before interest, taxes, depreciation, and amortization (EBITDA) margin expanded 55bps YoY to 10 per cent, and continued momentum in value-added Agri Products.  Looking ahead, once recent pricing in cigarettes fully flows through, ITC’s earnings trajectory will likely hinge on growth across FMCG and Paperboards, the brokerage firm said. It maintained an 'ADD' rating on ITC with a discounted cash flow (DCF)-based revised target price of ₹320 (vs. ₹350). Key downside risk is higher-than-expected volume decline in cigarettes, it added.

 

According to analysts at Motilal Oswal Financial Services, in the cigarette business, the pass-through of the tax hike to consumers is still in progress. Thus, cigarette revenue and EBIT performance would remain weak. Earnings pressure on cigarettes offsets the benefits of recovery in FMCG and Paper. 

 

ITC has been trying to lower the tax impact (launched 30 new SKUs recently), but the sharp tax increase and competition from illicit cigarettes would take time to normalize. A calibrated price hike will continue to impact cigarette EBIT performance in the coming quarters. The brokerage firm maintained a 'Neutral' rating on ITC with it’s a Sum-of-the-Part (SoTP)-based target price of ₹300 (implying 18x FY28E EPS).  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.