ITC Q1 FY26 results preview: What to expect

After delivering consistent but unspectacular growth last year, ITC’s April–June 2025 quarter (Q1 FY26) will test whether its newer ventures meaningfully boost overall performance alongside its cash-cow cigarette unit. The conglomerate is slated to announce results on August 1, 2025. Investors are watching for steady cigarette volumes, improving fast-moving consumer goods (FMCG) profits, and a continued post-pandemic uptick in hotels and other businesses to offset lingering weakness in paper and agribusiness. With the hotels division in the process of being demerged and one-off impacts (like new hotel launch costs) largely behind, this quarter could shine a light on the true earnings power of ITC’s diversified portfolio. The year that was (FY25 recap) Resilient overall, but profit flat: ITC navigated FY25 with about 7 per cent revenue growth but essentially flat net profit, as strength in cigarettes and agri was offset by headwinds in paper, hotels, and input costs. Full-year consolidated EBITDA rose modestly, indicating a resilient core despite a “challenging macro-economic and operating environment”. Cigarettes steady: A stable tax regime and crackdown on illicit trade aided legal cigarette volume recovery, yielding about 6 per cent YoY growth in cigarette revenue in Q1 FY25. For the full year, the heavy-weight cigarette segment provided a reliable earnings anchor with high margins. FMCG scaling up: ITC’s non-cigarette FMCG arm (staples, foods, personal care) grew in the mid-single digits. In Q1 FY25, FMCG revenues rose 6.3 per cent YoY with a 10.4 per cent uptick in segment pre-tax profit as the division benefited from improved scale and product mix. This segment crossed Rs 5,500 crore revenue last year, contributing roughly 27 per cent of Q1 FY25 sales. Mixed bag in others: The hotels business rebounded strongly from pandemic lows – Q1 FY25 revenue jumped 14 per cent – but startup costs from the new ITC Ratnadipa in Colombo crimped hotel profit (segment PBT down 9 per cent YoY). Agribusiness revenues surged 22 per cent in Q1 last year on value-added agri exports (wheat, leaf tobacco), even as higher commodity costs pinched agri margins. In paperboards, cheap Chinese imports and rising wood prices drove a 7 per cent drop in revenue and a 46 per cent plunge in profit for Q1 FY25, a drag that persisted through the year. Expansion and demerger moves: Management and shareholders approved the spin-off of ITC’s hotels arm (ITC Hotels) in FY25, aiming to unlock value without sacrificing control. At the July 2025 AGM, CEO Sanjiv Puri announced a Rs 20,000 crore investment push over five years, expressing “unwavering confidence” in India’s growth and ITC’s plans to build a “future tech, climate positive, innovative and inclusive enterprise”. This war-chest is earmarked to scale up ITC’s newer businesses and infrastructure. How last year’s Q1 looked (Q1 FY25 baseline) In the year-ago quarter (Q1 FY25), ITC delivered consolidated net profit of around Rs 5,092 crore on revenue of Rs 20,030 crore. Profit was essentially flat (+0.3 per cent YoY) while revenue climbed 7.5 per cent YoY, implying some margin compression. EBITDA margin was dented by weakness in low-margin segments (agri and paper) even as the core consumer businesses held firm. Key segment highlights from that quarter: Cigarettes: Revenue Rs 8,842 crore (+5.8 per cent YoY), with volumes up in low-single-digits and segment pre-tax profit up 6.3 per cent. Stable excise taxes enabled ITC to avoid any price shocks, helping volume recovery in legal cigarettes. Branded FMCG: Revenue Rs 5,499 crore (+6.3 per cent YoY); segment EBIT grew faster at +10 per cent YoY, as operating leverage improved. Categories like packaged foods (noodles, snacks, biscuits) and personal care saw growth despite a subdued consumer demand environment. Hotels: Revenue Rs 713 crore (+14 per cent YoY