ITC Ltd. share price target

ITC reported a 22% YoY decline in consolidated net cigarette revenue (INR104.1b) vs. our expectation of an 18% decline. Given a sharp increase in taxes, ITC has adopted a calibrated price hike strategy (unlike immediate tax pass-on historically) to protect the loss of consumers to illegal cigarette markets.

Effective 1st Feb’26, the cigarette industry is witnessing one of its most disruptive regulatory resets after the implementation of GST 2.0.

We maintain our HOLD rating on the stock with an upside potential of 6% from the CMP

Cigarettes business transitioned to the new tax structure, following sharp tax hikes effective 1st Feb'26

Paperboard to expand margins due to benefits of MIP Agri exports to take a knock in 1Q/1H27 ITC reported in line numbers enabled by strong growth in FMCG and Paperboard even as Cigarette sustained profitability while Agri business suffered as west Asia war affected exports. We expect cigarette business to show severe pressure on volumes and profitability as full impact of sharp increase in excise and subsequent price hikes play out. We expect downtrading in Kings and RSFT which can deteriorate sales mix also. We expect gradual but delayed recovery, once a base is settled. We expect ITC to...

ITC continued to deliver a healthy performance in core segments in 3QFY26. Consol. gross cigarette sales grew 8% YoY (est. 7%) and volume rose ~6.5% (vs. est. 6%). The premium cigarette segment continued to outperform.

Q3FY26 performance: ITC's net revenues grew by 5.7% YoY to Rs.18,017.1cr in Q3FY26. Growth was aided by 11.1% YoY growth in FMCG-others and 8% YoY growth in Cigarettes business. Gross margins witnessed 46bps YoY improvement to 54.9% due to favourable input price environment. EBITDA margins improved...

We revise our rating to HOLD on the stock with an upside potential of 8% from the CMP.

Significant tax hike in cigarettes after a brief period of stable tax: Government has announced significant increase in the tax rate on cigarettes in the range of 20-55% (depending on various sizes) after a brief period of stable tax environment over FY22-25. Revised Excise duty on the cigarette stands in the range of Rs2,100/1000 sticks to Rs8,500/1000 sticks depending on the size of the cigarettes. This will be over and above the GST rate hike to 40% from 28% on cigarettes. Tax hike on cigarettes and other tobacco products will be effective from 1st Feb, 2026 with end of...

The government in its recent notification has increased taxes on cigarettes, effective from 1st Feb’26. New rates will increase the taxes on cigarettes by ~50% (assuming NCCD continues).

*over or under performance to benchmark index In Q2FY26, ITC's standalone revenue declined 2.7% YoY to Rs. 19,148cr, due to a sharp drop in agri business exports. However, core segmentscigarettes and...

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.

About the stock: ITC is diversified consumption play with presence in businesses such as cigarettes, FMCG, Agri and Paperboard, Paper & Packaging (PPP) in India. Its strategy hinges towards utilising funds generated from cash cow cigarette business in improving the growth of FMCG and other businesses. The company...

ITC’s Q1FY26 performance stood below our estimates across the board, with
revenue growth below our estimates by 3.6% mainly led by higher intersegment
adjustments, while EBITDA and Adjusted net profit stood below our estimates led by poor operational performance.

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.

Sales 21% higher vs consensus on one off sales in Agribusiness. EBITDA also 9% above cons.

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.