ITC Q2 FY27 Results (NSE: ITC)
Signal: Growth reaccelerated
The read
The post-Q2FY26 margin recovery has reversed: consolidated revenue rose 43.9% YoY to ₹30578.40 crore largely because cigarette excise is reported in revenue and costs, while cigarette segment result fell 26.0% and PAT fell 18.5% to ₹4229.33 crore. FMCG-Others and the acquired paper business are improving, but the core cigarette earnings trajectory remains the decisive issue.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹30,578.4 Cr | +43.9% | +3.6% |
| Net profit | ₹4,229.33 Cr | -18.5% | |
| EPS | ₹3.32 | -18.8% | |
| EBIT margin | N/A |
P&L walk
Revenue increased to ₹30578.40 crore, +43.9% YoY and +3.6% QoQ, but excise duty rose to ₹10309.77 crore from ₹1754.23 crore, compressing the operating bridge; PAT declined to ₹4229.33 crore, -18.5% YoY, despite lower finance costs and other income remaining material at ₹507.36 crore.
Segments
Cigarettes drove the consolidated revenue increase, with segment revenue up 72.5% YoY to ₹16237.11 crore, but dragged earnings as segment result fell 26.0% to ₹4044.49 crore; FMCG-Others was a counterweight, with result up 31.4% to ₹576.69 crore.
Key positives
- FMCG-Others segment result increased 31.4% YoY to ₹576.69 crore, despite continuing brand-building and gestation costs.
- Standalone operating cash flow rose to ₹7765.58 crore in H1FY27 from ₹5738.67 crore in H1FY26, while standalone PPE and CWIP increased to ₹18997.39 crore and ₹1893.98 crore.
- Paperboards, Paper & Packaging revenue increased 35.9% YoY to ₹3017.45 crore, including Century Pulp and Paper from 1 August 2026.
Key concerns
- Cigarettes segment result declined 26.0% YoY to ₹4044.49 crore while segment revenue rose 72.5%, showing the earnings burden from the cigarette excise-duty increase.
- Gross margin after disclosed direct costs compressed by approximately 1730bps YoY as excise duty increased to ₹10309.77 crore from ₹1754.23 crore; the filing does not disclose a raw-material or pricing offset.
- Consolidated PAT fell 18.5% YoY to ₹4229.33 crore despite revenue growth, and other income declined 13.2% YoY to ₹507.36 crore.
Research and educational content only. Not investment advice.