Archive · 31 Jul 2026
ITC Q1FY27: Cigarette Tax Hikes Drive Weak Earnings
ITC is a big Indian company that sells cigarettes, food, and other products.
In the first quarter of its 2027 financial year, it is expected to earn less money because the government raised cigarette taxes by about 45%.
This means the company has to raise cigarette prices, but it can’t raise them enough to keep profits the same.
The cigarette sales volume is expected to fall by about 9‑11%, and the profit from cigarettes will drop by 20‑32%.
On the other hand, ITC’s food and household product business (FMCG) is still growing, with sales up about 12‑15% and profits staying around 8%.
The agriculture part of the business is expected to do poorly because of shipping problems in West Asia.
Overall, ITC’s total revenue is expected to fall about 17‑20%, and its earnings before interest, taxes, depreciation and amortization (EBITDA) will also shrink.
Analysts think the company will improve in the next quarter as it adjusts prices and focuses on higher‑margin products.
ITC is expected to report a weak Q1FY27 quarter due to 45% cigarette tax hikes.
Cigarette volumes are projected to fall 9–11% YoY, with EBIT dropping 20–32%.
FMCG sales are expected to grow 12–15% YoY, keeping margins near 8%.
Agri business revenue may decline 10–50% YoY because of West Asia shipping disruptions.
Overall revenue is forecast to fall 17–20% YoY, with EBITDA shrinking 12–27%.
- Who
- ITC Ltd, a Kolkata‑based Indian conglomerate
- What
- Q1FY27 earnings preview and analyst expectations
- When
- Results announced July 31, covering the April‑June quarter of FY27
- Where
- India
- Why
- Cigarette tax hikes and West Asia shipping disruptions are expected to pressure margins
- Expected Revenue Decline
- 17.5% YoY
- Projected EBITDA Decline
- 12–27% YoY
- Cigarette EBIT Drop
- 20–32% YoY
- FMCG Revenue Growth
- 12–15% YoY
- Cigarette Volume Decline
- 9–11% YoY
- Agri Revenue Outlook
- 10–50% YoY decline
- Paperboard Revenue Growth
- 6–11% YoY
Sources
ITC Q1 preview: Can FMCG resilience offset cigarette price hike impact on margins? 5 critical factors
ITC Q1 results preview: Analysts see a weak quarter; cigarette tax hikes likely to dent profit, margins- What to expect?
