ITC Expects FMCG Revival This Fiscal

Revenue Projected To Grow At 11% CAGR in FY26-28

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ITC Ltd delivered a healthy performance in its core segments despite a muted consumption environment, though margin pressures persisted. Gross cigarette sales rose 8% y-o-y (vs. estimates 6%) with approximately 6% volume growth (vs. estimates 5%). The premium cigarette segment continued to outperform. Cigarette EBIT (earnings before interest and taxes) grew 4.6% y-o-y (vs. est. 5.2%), while EBIT margin contracted 190 bps (basis points) y-o-y to 57.6% (vs. est. 59%), impacted by a sharp rise in leaf tobacco cost.

The FMCG segment posted a 5.5% y-o-y revenue increase (8.6% excluding notebooks). However, notebook deflation and unseasonal rains affected beverages. Growth was led by staples, dairy, premium personal wash, homecare, and agarbattis. EBIT fell 17% y-o-y, with margins contracting 180 bps to 6.9%, broadly in line with estimates.

Agriculture business revenue jumped 39% y-o-y (vs. estimates 15%), driven by trading in bulk commodities and higher leaf tobacco exports. EBIT margin declined 45 bps y-o-y to 4.5% (vs. est. 6%).