Diverse conglomerate ITC Ltd reported an 18.45 per cent decline in consolidated net profit at ₹4,229.33 crore for the September quarter (Q2FY26), primarily due to higher taxes hitting profitability in its core cigarette business, even as its FMCG, agribusiness, and paper segments posted robust performances. The Kolkata-headquartered company had posted a net profit of ₹5,186.55 crore in the corresponding quarter of the previous fiscal year. Consolidated revenue from operations for the quarter stood at ₹30,578.4 crore, marking an apparent increase of 43.85 per cent compared to ₹21,255.86 crore recorded in the year-ago period; however, the company clarified that these top-line figures are not strictly comparable owing to significant changes in tax computation methodology introduced from February 1. On an adjusted basis after accounting for the revised tax structure, net revenue was up by 5 per cent on a consolidated level. The cigarette segment, which traditionally contributes the largest portion to the company’s bottom line, saw its pre-tax profit shrink by 25.9 per cent to ₹4,044.49 crore from ₹5,462.1 crore in Q2FY26. ITC attributed this margin squeeze to an unprecedented escalation in tax rates, noting that legal industry cigarette volumes remained under severe pressure throughout the quarter as consumers and the broader market adjusted to higher duty structures. Nevertheless, the segment recorded a sequential rise in pre-tax profit, indicating that the company’s strategic, calibrated price increases are beginning to yield positive results and stabilize profitability over time. In contrast to the headwinds faced by the tobacco division, ITC’s non-cigarette FMCG segment turned in a stellar performance, marking its fourth consecutive quarter of double-digit top-line expansion with revenue growth scaling a 14-quarter high. Revenue from the FMCG business surged by 19 per cent to reach ₹7,218.36 crore, while its pre-tax profit jumped by an impressive 31.4 per cent to ₹576.69 crore during the second quarter, buoyed by solid consumer demand across packaged foods, personal care, and other daily staples. Additionally, the paper and paperboards division demonstrated strong recovery momentum during the quarter under review, further diversifying the company’s earnings base. ITC’s agribusiness segment also delivered robust financial performance despite persistent trade disruptions across the West Asia region that impacted global logistics and commercial shipping routes. The agribusiness division logged a revenue of ₹4,550.6 crore for the quarter, reflecting a year-on-year growth of 12.7 per cent, while its pre-tax profit rose over 14 per cent to settle at ₹518.41 crore. Overall, while heavy tax levies on tobacco products acted as a drag on ITC’s quarterly earnings report, the strong operational performance and double-digit growth momentum across its FMCG, agribusiness, and paper verticals highlight the growing resilience of the company’s diversified business model.
ITC Q2 Profit Drops to ₹4,229 Crore Amid Cigarette Tax Pressures; FMCG Up 19%
