ITC Ltd is set to declare its Q2 FY26 earnings today, on October 30, and analysts expect moderate revenue growth mainly driven by steady tobacco sales, improvement of the FMCG segment, and robust agricultural business. Brokerages continue to hold a favorable view on the conglomerate, pointing to strong demand in the major sectors and the constant pricing trends.
According to estimates, ITC is expected to post a net profit of Rs. 21,152.80 crore and revenue of Rs. 81,392.60 crore for the quarter ended September 2025.
The estimates imply about 6% YoY revenue growth, reflecting the broad-based contributions from cigarettes, FMCG, and agri.
Brokerage Axis Direct expects a 7% YoY increase in cigarette revenues, a 5% YoY increase in FMCG, and a 10% increase in agri revenues.
Conversely, the paperboard business is likely to be subdued and is expected to grow by only 4% due to weaker demand and cheap Chinese imports.
The cigarette segment, ITC’s largest revenue contributor, is expected to remain steady and resilient. Kotak Institutional Equities projects cigarette volume growth at 6% YoY and gross sales growth at 7% YoY.
However, EBIT margins may drop by about 200 basis points YoY due to the impact of high-cost tobacco leaf. Analysts highlight that tobacco prices have begun moderating, and margins could start to recover in H2 FY26.
Another factor to watch will be the impact of higher GST on tobacco, which may affect sales improvement in the near term.
ITC's FMCG segment, which covers packaged foods, personal care, and home essentials, is expected to record revenue growth of 4-5%.
Kotak estimates EBIT margins to be near 7.5%, increasing by 60 bps, aided by lower input costs for key raw materials.
Analysts note that while channel destocking impacted about 75% of the FMCG portfolio, the underlying demand remains firm, suggesting recovery potential.
The agriculture segment is expected to post 10% YoY growth with EBIT margins around 7.5% supported by higher exports and strong acquisition activity.
Conversely, the paper and packaging business may lag due to weak domestic demand, weaker exports, and the impact of cheaper Chinese supplies, with margins expected around 8.5% compared to 7.7% in Q1 FY26.
Brokerages are optimistic on ITC due to its healthy business mix, steady cash flows, and strengthening non-cigarette portfolio. Though temporary pressure from taxation and destocking remains, the longer-term growth outlook remains positive.
When ITC releases its official Q2 FY26 results later today, investors and analysts will closely monitor the cigarette volumes, FMCG margin trends, and management commentary on tax and consumption trends.