Sustaining cigarette volumes, FMCG recovery key monitorables for ITC stock

The disappointing FMCG performance could see recovery on better consumption since ITC has historically enjoyed industry-leading growth in several FMCG category drivers

ITC reported healthy volume performance in the April-June quarter of 2025-26 (Q1FY26), but margins remained under pressure. Consolidated revenue (ex-hotel business) in Q1FY26 grew by 21 per cent year-on-year (Y-o-Y) to ₹21,490 crore, led by cigarette and agri businesses. Gross margin contracted 700bp Y-o-Y to 52.4 per cent, due to high food inflation and the rising input costs of leaf, wood. The earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin contracted 510 basis points (bps) Y-o-Y to 31.7 per cent while Ebitda grew 4 per cent Y-o-Y to ₹6,820 crore. Profit before tax (PBT) and adjusted profit after tax