Shares of ITC Ltd. traded in the green on August 4, following the release of its Q1 FY26 results. The diversified conglomerate reported a largely flat net profit, in line with market expectations, but strong revenue growth across key segments sparked investor interest.
Q1FY26 Results Snapshot
ITC’s standalone net profit for the quarter ended June 30, 2025, stood at ₹4,912 crore — marginally down from ₹4,917 crore in the same quarter last year. While bottom-line growth remained subdued due to elevated input costs, the company’s topline performance offered some positives.
Revenue from operations rose 20% year-on-year to ₹21,059 crore, up from ₹17,593 crore in Q1FY25. The growth was led by strong performances in the cigarette, agri-business, and fast-moving consumer goods (FMCG) segments.
Segment-Wise Performance
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Cigarettes: Revenue rose 8%, supported by a stable tax environment and strategic market interventions. However, rising costs of leaf tobacco continued to pressure margins—a trend that may persist through the rest of FY26.
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FMCG: This segment showed promising growth, benefiting from volume expansion and improved pricing strategies.
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Agri Business: Performance remained robust, driven by exports and domestic demand.
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Paperboards: This segment continued to face headwinds due to weak demand and pricing pressures.
Management Outlook
ITC remains optimistic about the economic landscape, citing easing inflation, expected rate cuts, increased liquidity support by the RBI, and proactive government spending as potential catalysts for growth in the coming quarters.
Should You Buy, Sell, or Hold?
Buy, if you’re looking for a long-term play in a diversified business with strong brand equity and defensive characteristics. The company’s steady performance, strong cash flows, and dividend history make it appealing to conservative investors.
Hold, if you’re already invested and seeking stable returns. The near-term pressure on margins may limit upside, but the long-term story remains intact with growth in FMCG and continued dominance in cigarettes.
Sell, if you are looking for high-growth opportunities in a shorter timeframe. While ITC remains fundamentally strong, the lack of profit growth and margin compression could limit stock performance in the near term.
Bottom Line:
ITC’s Q1 results were steady, with strong revenue growth offsetting margin pressures. For long-term investors, it continues to be a reliable bet in a diversified portfolio — though near-term challenges warrant a cautious approach.
