ITC Q2 Results 2025: ITC profits rise but revenue falls, margins outperform expectations

News Topical, Digital Desk : ITC Limited has released its September quarter (Q2 FY26) results. The company's profit increased year-over-year to ₹5,180 crore, slightly better than market expectations of ₹5,062 crore. However, total revenue declined to ₹18,021 crore, compared to ₹18,648 crore in the same quarter last year. Despite revenue pressure, the company's EBITDA margin expanded to 34.7%, which was much better than market expectations.

ITC cigarette volume growth was 6%, which is in line with estimates.

Quarterly Results Highlights - Profit (PAT): ₹5,180 crore (previous year ₹5,078 crore) - Revenue: ₹18,021 crore (previous year ₹18,648 crore) - EBITDA: ₹6,252 crore (estimate ₹6,290 crore) - EBITDA Margin: 34.7% (estimate 32.7%) - EPS: ₹4.13 per share - Other Income: ₹897 crore
 

FMCG (Cigarettes + Others):
The FMCG segment proved to be the backbone of ITC. Cigarette business revenue grew 6% to ₹8,723 crore, while the FMCG-Others segment reached ₹5,964 crore. Brand building costs increased in packaged foods and personal care products, but demand remained stable. Segment EBITDA was ₹594 crore, showing improved performance from the previous quarter.

2. Paperboards, Paper and Packaging - Revenue was ₹2,220 crore. Growth was limited due to price pressure and low demand.

3. Agri Business - Revenue in the agri segment was ₹3,976 crore, a year-on-year decline. The company stated that fluctuations in global commodity prices and export restrictions impacted growth. Tax Expense: ₹1,672 crore Exceptional Gain: ₹88 crore (profit related to insurance claim) Total Income: ₹20,280 crore Total Expenses: ₹13,517 crore Operating Profit: ₹6,763 crore.

No impact of hotel business ITC's hotel business has been demerged since January 2025. Hence, there is no direct impact of hotel operations on the Q2FY26 results. In the same period last year, the hotel business generated revenue of ₹700 crore, which has now been shifted to the "discontinued operation". The company said that "consumer sentiment and rural recovery are showing improvement. Regulatory clarity and product innovation will enable us to maintain stable margins in the coming quarters as well." The company will continue to focus on brand building so that the "FMCG Others" segment becomes more profitable in the long run. 

What was good: The company's EBITDA margin was 34.7%, better than the estimated 32.7%. This means that the company kept its operating expenses under control and maintained profitability. Profit increased by 2%, indicating that the cigarette and FMCG businesses performed well. Strong margins also indicate that pricing power and cost efficiency handled pressure. 

Where weakness was seen: The company's revenue declined to ₹18,021 crore from ₹18,648 crore last year, representing a topline decline of approximately 3.3%. Revenue was also lower than market expectations (₹19,220 crore), indicating sluggish demand in some segments. EBITDA was ₹6,252 crore, which is almost in line with expectations but represents a slight decline compared to the previous year. 

What the data says: ITC reported a slight increase in profits but a decline in revenue, meaning pressure on the top line while the bottom line remained stable. This was primarily due to the stability of the cigarette business and margin improvement in the FMCG segment. Market experts say that lower raw material costs and improved consumer sentiment supported the company.

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