Sharekhan Broker Research reports

ITC posted a mixed performance in Q1FY26, with strong revenue growth driven by cigarette and agri business, while margins declined sharply and missed estimates.

HUL’s standalone revenue grew by 3.9% y-o-y to Rs. 15,931 crore, largely in line with our and average street expectations of Rs. 15,954 crore and Rs. 16,065 crore, respectively. Domestic volume grew by 3% y-o-y.

Net earnings were in line with expectations at Rs. 529 crore, increasing 3.2% (y-o-y) but declining 6.0% (q-o-q). This was driven by strong PPOP growth, though higher credit costs offset it.

Consolidated revenues stood at Rs. 1,139.3 crore (rising 9.0% y-o-y), with operating profit growing 16.6% y-o-y to Rs. 121 crore. Freight revenues rose 4.9% y-o-y to Rs. 539 crore, and EBIT declined by 17.9% YoY to Rs. 12.8 crore due to weak industrial sector growth.

Q1FY26 revenues rose 44% led by robust growth across segments. The consumer durables segment did well, growing 33%, amid the RAC industry tailwinds on the back of strong demand from the commercial AC segment.

Strong operational performance surprised positively, as margins improved by 555 bps to 27.9%. Revenue growth was muted at 5%, owing to fluctuations in product delivery amid geopolitical tensions.

Q1FY26 numbers were decent and in line with our estimates, with revenues at Rs 5,073 crore, rising 11% y-o-y, mainly led by the T&D; business which grew 26% y-o-y. EBITDA margins rose ~98 bps y-o-y to 7.0%. As a result, PAT rose 42% y-o-y to Rs 125 crore.

Reported revenues grew 19.5% y-o-y to Rs. 620.7 crore in line with our estimates of Rs. 622.1 crore, driven by strong momentum in CPCU revenues. CPCU revenues stood at Rs. 620 crore, up 19.9% y-o-y.

Net earnings beat estimates by 2.8% (up by 21.8% y-o-y and 4.8% q-o-q) to Rs. 4,765 crore driven by healthy AUM growth, lower opex and credit cost that was below estimates. NII was almost in line with estimates, growing by 22.3%/4.3% (y-o-y/q-o-q) to Rs. 10,227 crore.

Q1FY26 numbers were decent on low expectations. Net interest income (NII) at Rs. 11,435 crore (above estimates) down by 1% y-o-y/q-o-q each.