ITC Q2 PAT drops 19% YoY to Rs 4,229 cr
Profit before exceptional items and tax fell 16.98 year on year to Rs 5,720.28 crore in Q2 FY27 compared with Rs 5,454.97 crore in Q2 FY26. The company reported exceptional expenses of Rs 25.66 crore during the quarter, primarily relating to the acquisition of the pulp and paper business of Aditya Birla Real Estate, operated under the name Century Pulp and Paper.
However, EBITDA declined 15.7% YoY to Rs 5,645 crore, while profit before tax (PBT) fell 18.4% to Rs 5,695 crore during the quarter.
ITC said group entities, including ITC Infotech, SNPL, Sproutlife and ITC Hotels, delivered strong performance during the quarter.
The cigarettes business continued to face pressure from an unprecedented increase in taxation, which impacted legal industry volumes. The company said it adopted a calibrated strategy to mitigate the risk of disproportionate volume shifts towards illicit trade while protecting its consumer franchise. It undertook several initiatives to strengthen its portfolio, reinforce market positioning and counter the growing presence of globally smuggled cigarette brands through the introduction of new variants and proprietary trademarks with international appeal.
The company also highlighted a sharp increase in seizures of smuggled cigarette consignments by enforcement agencies across the country, indicating the growing exploitation of tax arbitrage opportunities in the domestic market.
The FMCG segment sustained its strong double-digit growth momentum, led by biscuits, snacks, noodles, spices, salt, frozen snacks, homecare and notebooks, which recorded growth of over 20%. Dairy and personal wash categories also delivered high-teens growth. The segment's EBITDA margin expanded by more than 50 basis points on both year-on-year basis.
ITC's digital-first and organic product portfolio maintained its strong growth trajectory, recording 70% YoY growth, with annual revenue run rate (ARR) exceeding Rs 1,800 crore.
The Agri Business segment registered revenue growth of 12% year on year, supported by value-added products and leaf tobacco exports. However, the overall segment continued to face challenges from disruptions arising out of the West Asia conflict and delayed customer call-offs.
The Paperboards, Paper and Packaging segment witnessed a strong recovery in the paper business, with segment revenue increasing 36% YoY and segment profit before interest and tax (PBIT) rising 48%.
ITC's fresh food business continued to gain consumer traction through its range of offerings under ITC Master Chef Creations, ITC Aashirvaad Soul Creations, ITC Sunfeast Baked Creations and Sansho by ITC Master Chef. The business recorded robust gross merchandise value (GMV) growth of 53% year on year, with ARR crossing Rs 320 crore.
ITC noted that the operating environment remained challenging amid renewed geopolitical tensions and trade disruptions. Elevated crude oil and crude-linked input prices, supply chain constraints and higher freight costs continued to exert pressure on businesses. Global inflationary pressures also intensified due to rising energy and food prices, alongside elevated sovereign bond yields and tighter financial conditions. In India, headline inflation increased, driven by a broad-based rise in food, fuel and core components.
Despite these pressures, the Indian economy continued to demonstrate strength, underpinned by resilient domestic demand across rural and urban markets. However, deficient and uneven monsoons and lower reservoir levels, alongside strengthening El Ni?o conditions, pose risks to agricultural output and the inflation trajectory. Geopolitical developments, climatic conditions, inflationary headwinds and consumer sentiment would remain key monitorables.
The macroeconomic fundamentals of the Indian economy remain resilient, supported by proactive and agile policy actions by the Government of India. Sustained public capex, improving trends in private capex, strong credit growth, healthy bank and corporate balance sheets, and measures to curb foreign exchange volatility and strengthen investment activity augur well for sustained growth of the Indian economy.
Meanwhile, the company?s board approved the scheme of amalgamation of Sproutlife Foods, a wholly owned subsidiary, with the company.
ITC is one of India's largest diversified conglomerates with businesses spanning FMCG, cigarettes, hotels, paperboards and packaging, agri business and information technology.
The counter advanced 1.58% to Rs 272 on the BSE.
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