ITC Q1 FY27 Results: Revenue Jumps 28%, Profit Declines Despite Strong FMCG Growth

BY ADMIN • FILED 31 Jul 2026, 6:11 PM

ITC Limited reported its financial results for the first quarter of FY27 on July 31, 2026, delivering strong revenue growth driven by its FMCG, paperboards, packaging, and agri businesses. However, higher excise duties on cigarettes and increased operating expenses impacted profitability, leading to a decline in quarterly net profit compared to the same period last year.

ITC Q1 FY27 Financial Highlights

Standalone Performance

Revenue from Operations: ₹26,943 crore, up 27.9% YoY
Total Income: ₹27,589 crore
Profit Before Tax (PBT): ₹4,759 crore
Net Profit (PAT): ₹3,579 crore, down 27.1% YoY
Earnings Per Share (EPS): ₹2.86

While revenue witnessed impressive growth, profitability was affected due to higher excise duty on cigarettes following changes in the tax structure introduced earlier this year.

Consolidated Performance

Revenue from Operations: ₹29,523 crore, up 27.6% YoY
Total Income: ₹30,179 crore
Profit Before Tax: ₹5,861 crore
Net Profit: ₹4,509 crore
Basic EPS: ₹3.51

The consolidated results included an exceptional gain of ₹405.88 crore arising from the remeasurement of ITC’s investment in Sproutlife Foods after it became a subsidiary from April 1, 2026.

Segment Performance

FMCG Business Continues to Drive Growth

The FMCG business remained the company’s largest revenue contributor.

FMCG Revenue: ₹21,866 crore
Cigarette Revenue: ₹15,384 crore
FMCG Others Revenue: ₹6,482 crore

Although cigarette sales remained strong, margins were impacted by the higher central excise duty introduced after the expiry of GST Compensation Cess.

The non-cigarette FMCG portfolio—including packaged foods, personal care, stationery, dairy products, chocolates, coffee, and snacks—continued to invest heavily in brand building while maintaining healthy EBITDA growth.

Agri Business

The agri business generated revenue of ₹8,082 crore during the quarter.

Despite lower profitability compared to the previous year, the segment continues to play a strategic role by supporting ITC’s integrated value chain and exports.

Paperboards, Paper & Packaging

Revenue from this segment increased to ₹2,307 crore, supported by steady demand from domestic and industrial customers.

Segment profit also improved compared to the corresponding quarter last year.

Key Corporate Developments

During the quarter, ITC strengthened its consumer products portfolio through strategic investments.

Sproutlife Foods Becomes a Subsidiary

Sproutlife Foods Private Limited became an ITC subsidiary effective April 1, 2026, after ITC obtained the right to appoint the majority of directors on its board.

The acquisition resulted in an exceptional accounting gain of ₹405.88 crore, which has been reflected in the consolidated financial statements.

Increased Stake in Mother Sparsh

ITC also increased its investment in Mother Sparsh Baby Care Private Limited, raising its fully diluted ownership to 49.32%.

This investment aligns with ITC’s strategy of expanding its presence in the fast-growing premium baby care market.

Why Profit Declined Despite Higher Revenue

The quarter presents an interesting picture.

Although revenue increased by nearly 28%, standalone profit declined because:

Higher central excise duty on cigarettes significantly increased tax-related expenses.
Continued investments in FMCG brands and product expansion raised operating costs.
Employee and other operating expenses increased.
Comparisons with last year’s profit were affected by changes in the tax structure.

Management noted that the revised excise duty makes revenue figures less comparable with previous periods because excise duty is included in gross revenue, whereas GST is excluded under accounting standards.

Management Outlook

ITC continues to diversify beyond cigarettes by strengthening its packaged foods, personal care, agri, paperboards, and digital businesses.

The company remains focused on:

Expanding premium FMCG brands
Scaling newly acquired businesses
Strengthening supply chain integration
Driving long-term sustainable growth across multiple business segments

Its diversified business model continues to provide resilience despite regulatory changes affecting the tobacco business.