ITC

ITC Ltd shares surged nearly 3% in early trade on Monday, emerging among the top gainers on the Nifty 50, as investors looked beyond the company's weak June-quarter earnings and focused on expectations of a gradual recovery in its core cigarette business. The stock rose as much as 2.94% to ₹289.25, rebounding after ending 1.42% lower at ₹281 on Friday ahead of the earnings announcement. Despite the recovery, ITC shares remain down 22.8% so far in 2026, compared with a 6.8% decline in the Nifty 50. The company has a market capitalisation of over ₹2.4 lakh crore. ITC reported a weaker-than-expected performance for the June quarter, with standalone net profit falling 27.1% year-on-year to ₹3,578.8 crore, while revenue declined 14.4% to ₹16,908 crore. EBITDA dropped 27.9% to ₹4,514 crore, and the EBITDA margin narrowed to 26.7% from 31.7% in the corresponding quarter last year. Both profit and revenue fell short of CNBC-TV18 poll estimates. Despite the earnings miss, analysts maintained a Neutral rating on the stock with a target price of ₹310. They attributed the weak performance primarily to lower profitability in the cigarette business but said the company appears to be repositioning its portfolio following the recent tax regime changes. The brokerage expects cigarette EBIT recovery to gather pace and approach neutrality by the fourth quarter of FY27. It also noted that while the FMCG and paper businesses delivered revenue broadly in line with expectations, margin performance remained below estimates.