ITC Ltd., a significant player in the fast-moving consumer goods (FMCG) segment and the cigarette industry, has continued to enjoy strong analyst support. The stock has seen volatility lately; however, 92% of analysts are saying "Buy" due to the strong fundamentals and recovery potential. Out of 39 analysts covering the stock, 36 are bullish, while only two recommend holding, and one suggests selling.
The company’s results for the June quarter reflected 21% year-on-year revenue growth, a clear sign of resilience across its diverse business segments. However, margins didn’t meet expectations. EBITDA was up 3%, and profit after tax (PAT) was up only 2%, mainly because of increasing input costs. Investors are closely monitoring ITC stock analysis to evaluate its performance and future outlook.
A significant contributor to the topline growth was the cigarette segment, which delivered an 8% increase in revenue with estimated volume growth of 7% supported by a stable tax environment and some market intervention. Notably, cigarette volume growth reached a multi-quarter high of 6%. The ITC Q1 FY26 results showcased stable growth, driven by robust revenue from its non-cigarette FMCG business.
The agribusiness segment showed a strong performance, delivering a 39% YoY revenue growth at Rs. 9,685 crore, driven by positive demand and pricing trends. The FMCG segment also delivered 5.2% YoY growth, with EBITDA margins improving by 60 basis points quarter-on-quarter, indicating operational efficiency.
A consistent ITC dividend yield makes it an attractive option for long-term, risk-averse investors. Despite visible growth in key segments, margin pressures were a significant concern. The high-cost leaf tobacco impacted profitability, resulting in a fall of 220 basis points in the EBIT margins.
The FMCG segment reported a YoY margin decline of 180 basis points, although sequential improvements offer some reassurance. Experts believe the ITC share price target could see an upward revision if the growth trajectory continues.
Additionally, the paperboard business continued to feel the pressure despite margin deterioration as a result of oversupply, coupled with poor realizations. The FMCG sector in India continues to expand, and ITC remains one of its most reliable and diversified players.
Also Read: HUL vs ITC: Which FMCG Giant Offers Better Long-Term Investment Potential?
Analyst Sentiment & Price Targets
Leading global brokerages remain optimistic:
Citi maintains a 'Buy' with a target of Rs. 500
Goldman Sachs assigns a Rs. 490 target, expecting margin recovery in H2
Macquarie calls it ‘Outperform’ with a Rs. 500 price target
Jefferies remains bullish with a higher target of Rs. 535
Despite the stock trading at Rs. 416, down 14% year-to-date, analysts see upside potential as margins are likely to stabilize in the second half of the fiscal year.
Market Cap stands strong at Rs. 5.2 lakh crore.
Stock P/E at 26 indicates a reasonable valuation.
ROE of 27.3% and ROCE of 36.8% reflect solid efficiency.
Dividend Yield at 3.45% backed by a 78.6% payout ratio, making ITC a reliable income stock.
A nearly debt-free balance sheet adds to its financial strength.
ITC continues to create long-term value for its investors through its strong performance, reliable dividend payments, and robust balance sheet. The short-term margin concerns remain, but the key fundamentals and diversified growth opportunities keep ITC well-positioned, and most analysts anticipate a recovery and continued improvement in earnings.