ITC Q2 FY26 profit rises 4.1% YoY to ₹5,180 cr; driven by cigarettes and FMCG growth
Sustained trade and marketing spends bolster FMCG growth; digital-first and organic brands cross ₹1,100 crore ARR as FoodTech business scales to ₹90 crore GMV.
ADVERTISEMENT
ITC Limited reported a steady performance in the quarter ended September 30, 2025 (Q2 FY26), with gross revenue rising 7.1% year-on-year (YoY) to ₹19,148 crore (excluding agri business), led by robust growth in its Cigarettes and FMCG segments. The company’s profit after tax (PAT) stood at ₹5,180 crore, up 4.1% YoY, while EBITDA rose 2.1% YoY.
On a consolidated basis, ITC posted 7.9% YoY growth in gross revenue (ex-agri), supported by strong operating performance from subsidiaries including ITC Infotech and ITC Hotels, alongside resilient results from Surya Nepal Pvt. Ltd. despite disruptions in Nepal during the quarter.
"Q2 sustained competitive levels of trade and marketing investments to support growth and market standing," the company said.
"India’s GDP grew by 7.8% in Q1 FY26, underpinning the strong macroeconomic fundamentals of the Indian economy that remain resilient despite global headwinds marked by geo-political tensions, evolving trade policy dynamics and heightened uncertainty and volatility in the operating environment.
The pathbreaking GST reforms introduced during the quarter are expected to enhance consumer affordability, boost consumption, revitalise small and medium enterprises, stimulate a virtuous cycle of economic growth & accelerate India’s journey to ‘Viksit Bharat’.
High frequency indicators for the quarter suggest mixed trends. While rural demand continued to demonstrate resilience, urban consumption witnessed uptick. On the other hand, industrial growth, core sector growth, automobile sales, credit growth and electricity and fuel consumption remained relatively subdued," it added.
FMCG Sustains Momentum
The FMCG–others segment maintained its growth trajectory, rising 8% YoY (ex-notebooks) despite operational challenges from excessive rains and the transition to the new GST regime. Growth was led by staples, dairy, premium personal wash, and agarbatti portfolios, while segment EBITDA margin improved 50 bps sequentially to 10%.
Commodity prices remained elevated but stable, enabling ITC to manage costs through price-volume-value rebalancing and smart revenue management.
The company noted strong traction in its premium and digital-first brands- including Yogabar, Mother Sparsh, Prasuma, Meatigo, and 24 Mantra- which collectively achieved an annualised revenue run rate (ARR) of about ₹1,100 crore.
In packaged foods, flagship brand Aashirvaad continued to post robust growth, aided by value-added variants such as Aashirvaad High Protein Atta and Ready-to-Cook Chapatis. Personal care brands Fiama and Savlon also delivered strong performance, supported by launches like Engage Eau De Toilette.
Cigarettes Continue to Drive Core Earnings
The Cigarettes segment reported 6.8% YoY growth in net segment revenue and 4.3% rise in PBIT, driven by a strong showing in differentiated and premium offerings. Strategic portfolio interventions in key markets helped counter illicit trade and bolster market share. ITC noted that stability in cigarette taxation and enforcement measures continue to aid recovery in legal sales, supporting both the company’s performance and government revenue.
Meanwhile, the Paperboards, Paper & Packaging business posted a 5% YoY rise in revenue and 17% sequential growth in profit, with margins improving 90 bps Q-o-Q. The segment benefited from higher volumes and easing wood prices, even as the industry contended with low-cost imports. The government’s imposition of Minimum Import Price (MIP) and proposed anti-dumping duties on paperboard from China and Chile provided a partial relief.
FoodTech Gains Traction
ITC’s FoodTech vertical, part of its ITC Next growth strategy, continued to scale up with over 60 cloud kitchens across five cities, adding seven new kitchens during the quarter. The business achieved ₹90 crore GMV in H1 FY26, up from approximately ₹105 crore in FY25, offering cuisines under brands like ITC Master Chef Creations, Aashirvaad Soul Creations, and Sansho by ITC Master Chef.
Outlook
Despite temporary disruptions from excessive rains and GST transition, ITC said it remains focused on cost optimisation, portfolio premiumisation, and innovation-led growth. With India’s GDP expanding 7.8% in Q1 FY26, the company expects GST reforms, lower inflation, and rural demand resilience to drive consumption recovery in the coming quarters.
Earnings per share (EPS) for Q2 FY26 stood at ₹4.13, up from ₹3.98 a year earlier.
"Lower inflation, reduction in interest rates and liquidity support by RBI, income tax cuts announced in the recent Union Budget along with front loading of Government expenditure, and the recent reduction in GST rates across a wide range of products are expected to progressively bolster consumption," the company said.
