ITC Q2 FY26 Earnings: Cigarettes Lead, FMCG Steady, Margins Mixed

ITC delivered a steady Q2 FY26 performance, with cigarette volumes driving growth while FMCG and agri segments remained under pressure. Key Highlights: Revenue: ₹21,256 crore, down ~1% YoY, due to weakness in agri exports and lower leaf tobacco trade. Net Profit: ₹5,187 crore, up ~4% YoY, aided by resilient cigarette and paperboard businesses. Cigarettes: Grew ~6.8% YoY, driven by strong demand and premiumisation. FMCG (Others): Posted ~7% growth, led by staples, dairy, and premium personal care products. Paper & Packaging: Margins improved ~90 bps QoQ, supported by stable raw material costs. Management Commentary: ITC highlighted that its core business remains strong, with continued growth in premium cigarette brands and stable performance in FMCG. The company remains focused on innovation, rural distribution, and operational efficiencies. Learning Insight: ITC’s results reflect a balanced business mix — cash generation from cigarettes funding growth in newer FMCG and sustainability-led businesses. However, muted top-line growth suggests pressure in non-cigarette segments, which must scale up to drive long-term rerating. What to Watch: FMCG margin improvement and volume recovery. Cigarette pricing trends and tax policies. Agri exports and hotel business momentum. Progress in sustainability and renewable initiatives.