Positives
Revenue stood at ₹17,248 crore, beating CNBC-TV18’s estimate of ₹16,820 crore.
Cigarette volumes grew by 4–5%, in line with expectations.
Negatives
EBITDA came in at ₹5,986 crore, below the estimated ₹6,100 crore.
Operating margin was 34.7%, short of the 36.3% estimate.
FMCG segment revenue grew 3.7%, missing the expected 6–8% range.
FMCG EBIT margins declined 270 basis points year-on-year, compared to the expected 200–300 basis point contraction.
While analysts have largely maintained their ratings on the stock, some have lowered their price targets following the results. However, the consensus target still indicates a potential upside of around 18% from current levels.
Global brokerage firm Jefferies has maintained its ‘Buy’ rating on ITC but has lowered the price target to ₹535 from ₹550 per share.
The brokerage said that ITC delivered broadly in-line results despite severe pressure in its FMCG and paperboard segments.
FMCG performance was mainly impacted by challenging macroeconomic conditions, leading to a sharp decline in EBIT.
Goldman Sachs has maintained a ‘Buy’ rating on ITC, with a price target of ₹490.
The brokerage said that the cigarette business continues to deliver steady growth. Although margins in this segment declined due to high tobacco cost inflation, Goldman expects a gradual recovery as cost pressures ease.
In the FMCG segment, margins were impacted by inflation in palm oil prices, but Goldman Sachs sees scope for improvement given the recent sharp decline in palm oil costs.
Meanwhile, the paperboards business remains under severe cost pressure, which is expected to persist for a few more quarters.
HSBC has a ‘Buy’ rating on ITC with a price target of ₹510, citing the stock’s attractive valuation in a stable tax environment. CLSA has an ‘Outperform’ rating on ITC, with a target price of ₹496.
Nuvama Institutional Equities has retained a ‘Buy’ rating, but revised its price target downward to ₹532 from ₹571 earlier.
The brokerage said that palm oil has started correcting, and FY26 could see its benefits. Agri exports is expected to stay strong on the back of a good monsoon and capacity expansion.
Out of the 40 analysts that have coverage on ITC, 38 of them have a ‘Buy’ recommendation on the stock, while one each have a ‘Hold’ and a ‘Sell’ rating.
Shares of ITC Ltd. settled with losses of 1.73% at ₹425.50 on Thursday. The stock is down 12% so far in 2025.
