Summary:
ITC reported an 18.45% YoY decline in Q2FY27 net profit to ₹4,229.33 crore, despite 43.85% revenue growth. Higher cigarette taxes and expenses pressured earnings, while FMCG growth and paper business recovery supported investor sentiment and share price gains.
ITC Limited (NSE: ITC, BSE: 500875) reported an 18.45% YoY decline in consolidated net profit to ₹4,229.33 crore for Q2FY27, compared with ₹5,186.55 crore in Q2FY26. The company announced its results on Monday, November 2, 2026. Higher cigarette taxes, rising operating costs and pressure on sales volumes affected profitability despite strong revenue growth.
ITC Q2FY27 Results: Revenue Rises 43.85%, Profit Declines
ITC's consolidated revenue from operations increased 43.85% YoY to ₹30,578.40 crore from ₹21,255.86 crore in the corresponding quarter last year.
However, expenses grew faster than revenue. Total expenses increased 69.65% YoY to ₹25,462.44 crore, putting pressure on earnings.
Consolidated total income, including other income, stood at ₹31,085.76 crore, an increase of 42.33% YoY.
The company's consolidated net profit also declined 6.2% QoQ from ₹4,508.8 crore in Q1FY27.
| Financial parameter | Q2FY27 | YoY change |
| Revenue from operations | ₹30,578.40 crore | +43.85% |
| Total income | ₹31,085.76 crore | +42.33% |
| Total expenses | ₹25,462.44 crore | +69.65% |
| Consolidated net profit | ₹4,229.33 crore | -18.45% |
Higher Cigarette Taxes Hit Profitability
The cigarette business remained the biggest drag on ITC's quarterly earnings.
Higher taxation introduced in February 2026 increased the cost burden on cigarette manufacturers. The GST rate on cigarettes rose from 28% to 40%, alongside changes in excise duties.
ITC increased product prices to absorb part of the additional tax burden. However, higher prices affected demand, while the company absorbed some costs to limit the movement of consumers towards illegally traded cigarettes.
Cigarette segment profit before interest and tax declined around 27% YoY to ₹3,813.5 crore, even as segment revenue reached ₹15,536.13 crore.
Higher raw material prices, freight expenses and supply chain disruptions added further pressure.
FMCG Growth Hits 14-Quarter High; Paper Business Recovers
ITC's non-cigarette businesses delivered better results.
The FMCG business, excluding cigarettes, reported revenue of approximately ₹6,967 crore, growing 16% YoY. This marked its strongest revenue growth in 14 quarters.
Biscuits, snacks, noodles, spices, salt, frozen snacks, homecare products and notebooks recorded growth exceeding 20%.
The agri business reported approximately 12% YoY revenue growth, supported by value-added products and leaf tobacco exports.
Meanwhile, the paperboards, paper and packaging business recorded 36% revenue growth. ITC also completed the acquisition of the Century Pulp & Paper undertaking on August 1, 2026, strengthening its presence in the segment.
Why ITC Share Price Rose After Q2 Results
Despite weaker quarterly profits, ITC shares gained during Tuesday's trading session on November 3, 2026.
The stock rose approximately 2% intraday to ₹271 on the NSE, compared with its previous closing price of ₹266.40.
The positive movement came as strong FMCG growth, improving paper business performance and sequential improvement in cigarette profitability partly offset concerns about the YoY decline in earnings.
The stock had remained largely flat during early trading before moving higher.
What Lies Ahead for ITC?
ITC's September-quarter results showed a clear difference between revenue growth and profitability.
While its FMCG, agri and paper businesses expanded, higher cigarette taxation continued to affect overall earnings.
Going forward, cigarette sales volumes, input costs, consumer demand and the contribution of non-cigarette businesses will remain important factors in ITC's financial performance.
