Downgrades

Resilient cigarette volumes, steady FMCG growth, and expected margin recovery from easing input costs underpin our positive outlook.

With an upside potential of 15% from the CMP, we maintain our BUY rating on the stock.

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

With an upside potential of 18% from the CMP, we maintain our BUY rating on the stock.

ITC sustained healthy performance in core segments in a tepid consumption environment, though margins remained under pressure.

ITC’s net revenues (including other operating income) grew by 9.6% y-o-y to Rs. 17,248 crore driven by 6% y-o-y growth in the cigarette business’s net revenues and a 17.7% y-o-y growth in the agribusiness’s revenue.

Sales 3% higher vs consensus likely on strong cigarette volumes. EBITDA 5% above cons. on higher margins

ITC delivered consolidated revenue growth (ex-hotel business) of 9% YoY (beat) in 3QFY25, mainly led by the cigarette business. EBITDA grew by 2% YoY to INR63.6b. APAT declined 7% YoY to INR48b.

With an upside potential of 16% from the CMP, we maintain our BUY rating on the stock.

Sales were 3% higher vs consensus likely reflecting strong cigarette volumes. EBITDA was 5% below expectations due to inflation

Sales were 12% higher vs consensus likely due to the volatile, pass-through-based Agri Business segment. EBITDA was in line

Recommendation With an upside potential of 11% from the CMP, we maintain our BUY rating on the stock.