ITC Share Price Analysis After Q1 FY27 Results | Complete Review
ITC Ltd · Deep Research
📝 Earnings Commentary: Q1 FY27 Results
[INTRODUCTION: Who is ITC?]
Chances are, you interact with ITC every single day without even realizing it. Whether it's the Aashirvaad atta in your kitchen, the Sunfeast biscuits with your evening tea, the Classmate notebooks on your desk, or a stay at a luxurious ITC Hotel, this Kolkata-headquartered conglomerate is woven into the fabric of the Indian consumer market. Originally established in 1910 as the Imperial Tobacco Company of India Limited, ITC has successfully transformed over the decades into a highly diversified giant spanning FMCG, Hotels, Paperboards & Packaging, and Agri-Business.
But even corporate giants face headwinds. ITC just posted its Q1 FY27 results, showing sales of almost ₹29,500 crore. But here's the twist — its profit actually went down. Let's break down exactly what happened.
The Big Numbers
On the surface, the topline looks fantastic. Revenue was up nearly 28% compared to last year, touching ₹29,523 crore. However, this jump looks bigger than it really is. A significant chunk of this growth is simply an accounting effect due to a change in how cigarette taxes are counted, following the government's recent hike in GST and excise duty on cigarettes.
The real story lies in the profitability. EBITDA (operating profit) fell by almost 24%, dropping to ₹5,181 crore. Net profit dropped over 16%, falling from ₹5,244 crore last year to ₹4,394 crore this year. As a result, Earnings Per Share (EPS) also came down, from ₹4.18 to ₹3.51.
Segment By Segment
- Cigarettes (The Cash Cow): ITC's biggest money-maker had the toughest quarter. Profit here fell by 35%. The sharp tax hike forced ITC to push up prices, which in turn hurt sales volumes and squeezed margins.
- Non-Cigarette FMCG (The Rising Star): This segment—covering food, personal care, and other daily products—did exceptionally well. Sales grew by 15%, and profit jumped 22%. This was largely driven by more consumers opting for premium products.
- Paperboards, Paper and Packaging (The Comeback): This business bounced back nicely with sales up 9% and profit surging a strong 38%, primarily thanks to cheaper wood and raw material costs.
- Agri-Business (The Weak Spot): Sales fell 17%, heavily impacted by the ongoing conflict in West Asia and tough global trade conditions affecting exports.
What Management Said
Looking ahead, ITC's management highlighted that there's a lot of macroeconomic uncertainty right now. Rising oil prices, global supply chain disruptions, and the impact of a weak monsoon are all critical factors to watch. However, on a positive note, they emphasized that underlying consumer demand from both rural and urban markets has remained resilient and strong.
The Bigger Picture: ITC's Evolution
While the cigarette segment's current tax woes are a drag on profits, it's worth zooming out to look at ITC as a whole. Over the past couple of decades, ITC has aggressively diversified to reduce its reliance on tobacco. Today, its non-cigarette FMCG brands (like Bingo!, YiPPee!, Savlon, and Fiama) are market leaders in their respective categories. Furthermore, ITC is a global exemplar in sustainability—it is the only enterprise in the world of its scale to be carbon-positive, water-positive, and solid waste recycling positive for over a decade.
Closing Line
So here's the simple takeaway: ITC's diversification strategy is working, with its newer businesses like FMCG and packaging stepping up and delivering strong growth. But cigarettes are still its biggest earner, and that segment is currently under immense pressure because of higher taxes. Until that tax pressure eases, or the newer segments grow large enough to completely offset it, ITC's overall profit growth may stay a bit slow.
📊 Quick health consolidated
P/E 18.4📈 Segment revenue & PBT Q1 FY25–FY27
₹ crore⚖️ Pros & Cons
- Almost debt-free (D/E 0.03)
- Dividend yield 5.05%
- ROE track record: 35.2% (3Y)
- Healthy dividend payout ~74.5%
- Sales growth 9.87% (5Y) – below par
- Negative TTM revenue & profit growth
- Q1 FY27 net profit down 22% QoQ
| Quarter | Sales (Cr) | Net Profit | EPS | OPM |
|---|---|---|---|---|
| Q1 FY27 (Jun 2026) | 19,114 | 4,509 | 3.58 | ~28% |
| Q4 FY26 (Mar 2026) | 16,050 | 5,113 | 4.08 | 40% |
| Q3 FY26 (Dec 2025) | 18,092 | 5,087 | 4.06 | 35% |
| Q2 FY26 (Sep 2025) | 18,021 | 5,180 | 4.13 | 35% |
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