ITC shares steady as Q2 profit falls 20% on higher cigarette taxes
ITC reported a 20% drop in Q2 FY27 standalone net profit after cigarette tax hikes; brokerages flag cigarette pressure but praise FMCG growth.
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what happened
ITC Ltd shares were flat at Rs 266.5 in early trading on Tuesday. The day before, the company reported a 20 percent fall in standalone net profit for the second quarter of FY27, as steeper cigarette taxes and weaker volumes hit profitability. According to TradingView, the stock is down 26.8 percent so far in 2026, while the Nifty 50 has lost 10.4 percent over the same period.
CLSA and JPMorgan both pointed to continued weakness in cigarettes, though they highlighted strong growth in non-cigarette businesses. Cigarette revenue fell 21 percent, while FMCG segment revenue rose 16 percent to Rs 6,967.2 crore. CLSA kept its Outperform rating with a target of Rs 390, while JPMorgan retained Neutral with a target of Rs 310.
why it matters
The cigarette business matters most for the stock. JPMorgan expects price increases and portfolio changes to narrow the decline in cigarette profit over time, but recovery may take a while. For now, FMCG growth is the main support for a company facing a heavy tax burden.
market impact
ITC shares: cigarette tax pressure is partly offset by FMCG growth, so the stock's direction is unclear
- ITC shares mixed — profit drop from cigarette taxes is offset by FMCG growth
tags
instruments
sources
- ITC shares flat after Q2 profit drops 20%; brokerages flag cigarette business pressure, but hail FMCG growth — TradingView, 3 November 2026 at 03:55 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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