Diversified conglomerate ITC Ltd reported around a 20 per cent year-on-year fall in standalone net profit to Rs 4,137.12 crore in the second quarter of this fiscal, as its cigarette business profitability was hit by higher taxation following the introduction of a new tax regime, The Hindu BusinessLine reported from the company's stock exchange filing. The Kolkata-headquartered company had posted a net profit of Rs 5,175.70 crore in Q2 FY26.

Source: The Hindu BusinessLine

Standalone revenue from operations during Q2 FY27 grew 45.65 per cent year-on-year to Rs 28,317.67 crore, against Rs 19,441.50 crore a year earlier. The company has cautioned that the figures are not directly comparable with earlier periods, because excise duty on cigarettes rose sharply from February 1, 2026 after the GST compensation cess expired, and because Century Pulp and Paper has been consolidated from August 1, 2026.

The cigarette segment itself showed the tax squeeze clearly: segment revenue rose 78.11 per cent to Rs 15,536.13 crore, but operating profit from the segment fell 27.23 per cent year-on-year to Rs 3,813.45 crore, according to the exchange filing reported by BusinessLine.

Source: The Hindu BusinessLine

Rs 4,137.12 crStandalone net profit, Q2 FY27
-20%Profit change year-on-year
Rs 28,317.67 crStandalone revenue from operations
+45.65%Revenue growth year-on-year

Overall profitability also thinned: EBITDA dropped 17 per cent to Rs 5,160 crore in Q2 FY27 from Rs 6,251 crore a year earlier, and the EBITDA margin contracted to 18.22 per cent from 31.15 per cent, Upstox reported. Total expenses rose 73.89 per cent year-on-year to Rs 23,617.78 crore, with the cost of materials consumed rising 15 per cent.

Source: Upstox

Outside cigarettes, the picture was brighter. ITC said its FMCG segment sustained strong double-digit growth, with biscuits, snacks, noodles, spices, salt, frozen snacks, homecare and notebooks each growing over 20 per cent, while its digital-first and organic portfolio grew over 70 per cent year-on-year to an annual recurring revenue of over Rs 1,800 crore. Paperboards, paper and packaging revenue rose 36 per cent, with segment profit before interest and tax up 48 per cent.

Source: Upstox

The board also approved, subject to necessary approvals, the scheme of amalgamation of Sproutlife Foods Private Limited with ITC; Sproutlife became a wholly owned subsidiary on September 28, 2026.

ITC shares had closed at Rs 266.40 on the National Stock Exchange on Monday, up 0.30 per cent, IANS reported; the earnings were announced after market hours, so the stock's reaction will come in Tuesday's session.

Source: IANS via Hi India