ITC shares: Can Nifty's worst performer since Diwali deliver healthy Q2 results today? -
Scheduled to report its earnings later today, ITC shares were trading 0.26 per cent higher at Rs 266.30 apiece on BSE. The stock has fallen 35.43 per cent since Diwali.
ITC Ltd, the worst-performing Nifty stock since Diwali 2025, is expected to report a 20.25 per cent year-on-year (YoY) decline in adjusted net profit at Rs 4,136 crore for the September quarter, despite a 3.12 per cent rise in consolidated net sales at Rs 20,110 crore, according to consensus estimates compiled by Bloomberg.
Scheduled to report its earnings later today, ITC shares were trading 0.26 per cent higher at Rs 266.30 apiece on BSE. The stock has fallen 35.43 per cent since Diwali, against a 9.73 per cent decline in the Nifty. The 12-month consensus target price for ITC stands at Rs 321.83, implying a potential upside of 21 per cent.
Cigarette volumes are expected to have declined 8 per cent as price increases to offset higher taxes deterred smokers. ITC raised prices again in late September and aims to restore profit per stick to pre-tax hike levels by the end of March, Nomura said.
Cigarette volume trends, pricing, FMCG demand, Agri and paper performance, and raw material (RM) cost inflation are key monitorables, Systematix said. The brokerage expects ITC's margins to contract quarter-on-quarter (QoQ) as the sharp increase in cigarette taxation through the basic excise duty (BED) has not been fully offset by price increases, while FMCG input costs remain inflationary. Stabilising leaf tobacco costs may partly offset the pressure, it said.
The cigarette business is expected to report a 21 per cent decline in net sales following the unprecedented excise duty hike effective February 1, leading to a 29 per cent decline in EBIT due to operating deleverage, Emkay Global said.
The Other FMCG segment is expected to deliver 13 per cent revenue growth and 8 per cent Ebitda growth YoY, implying a 50-basis-point contraction in Ebitda margin to 9.5 per cent. The Agri business is expected to report 6 per cent revenue growth, while the Paperboards and Packaging segment is expected to grow 30 per cent YoY, Emkay said.
"We expect ITC's net sales to grow 3 per cent YoY, while EBITDA is likely to decline over 15 per cent, mainly due to the drag from the cigarettes segment (high single-digit volume decline expected)," the domestic brokerage said.
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