💰 Financial Performance

Revenue Growth by Segment

As of H1 FY2026, Cigarettes contributed 37% to segment revenue (down from 47% in FY2018), FMCG-Others 23%, Agri-business 27%, Paperboards and Packaging 8%, and Others 5%. In H1 FY2025, the Agri-business segment witnessed a revenue growth of ~32% YoY, while standalone gross revenue in Q2 FY2026 grew 7.1% YoY (excluding Agri-business).

Geographic Revenue Split

Not specifically disclosed in available documents, though the company operates across 22 Indian states for agri-sourcing and has a significant presence in Nepal through its subsidiary Surya Nepal Private Limited.

Profitability Margins

Net Profit Margin (NPM) stood at 29% in FY2024 and moderated to 26% in FY2025. Operating Profit Margin (OPM) was 37.0% in FY2024 compared to 36.3% in FY2023. H1 FY2026 OPM moderated to 33% from 35% in H1 FY2025 due to paperboard weakness and higher agri-business mix.

EBITDA Margin

Standalone EBITDA margin stood at 35.1% in Q2 FY2026, representing a 185 bps YoY increase. Overall EBITDA grew 2.1% YoY in the same period.

Capital Expenditure

ITC plans to invest INR 20,000 Cr across businesses over the medium term. This includes an estimated INR 3,500 Cr for the acquisition of Century Pulp and Paper (CPP) from Aditya Birla Real Estate Limited.

Credit Rating & Borrowing

Commercial Paper rated [ICRA]A1+ (reaffirmed in November 2025). The company maintains a conservative capital structure with negligible debt (INR 11 Cr as of March 31, 2024) and long-term repayment obligations of only INR 58 Cr in FY2026.

⚙️ Operational Drivers

Raw Materials

Key raw materials include leaf tobacco, wheat, dairy, and agricultural commodities for the FMCG and Agri segments, and wood pulp/recycled fiber for the paperboard division. Agri-commodity sourcing handles ~3.5 million tonnes of annual volume.

Import Sources

Sourced across 22 Indian states and more than 20 agri-value chains. Specific international import countries are not listed, though leaf tobacco is a major internal and export commodity.

Key Suppliers

Not specifically named, but the company utilizes a robust supply chain and agri-farm network for backward integration.

Capacity Expansion

Planned investment of INR 20,000 Cr over the medium term. Acquisition of Century Pulp and Paper will add significant manufacturing capacity for pulp and paper products.

Raw Material Costs

Agri-business revenue grew 32% in H1 FY2025, but its higher share in the revenue mix contributed to a moderation in overall OPM to 34% from 38% because agri-trading typically operates on lower margins than cigarettes.

Manufacturing Efficiency

Paperboard PBIT margin expanded by 100 bps in Q2 FY2026 over Q1 FY2026, despite a 32% YoY decline in segment PBIT for H1 FY2026 due to industry headwinds.

Logistics & Distribution

Not disclosed as a specific percentage, but the company leverages an extensive nationwide distribution network as a core competitive advantage.

📈 Strategic Growth

Expected Growth Rate

7.90%

Growth Strategy

Growth is driven by a 'Cigarettes-plus' strategy: diversifying into FMCG-Others (staples, dairy, personal care), expanding the agri-business (leaf tobacco and value-added products), and inorganic growth such as the INR 3,500 Cr acquisition of Century Pulp and Paper. The demerger of the hotel business (ITC Hotels Ltd) allows for a more focused capital allocation.

Products & Services

Cigarettes, branded packaged foods (staples, snacks, dairy, frozen foods, chocolates, ghee), personal care products, stationery, safety matches, agarbatti, paperboards, specialty packaging, and IT solutions/services.

Brand Portfolio

Gold Flake, Century Pulp and Paper, ITC Infotech, Surya Nepal.

New Products/Services

Recent additions include chocolates, ghee, dairy, and frozen food products to the branded packaged foods segment.

Market Expansion

Focusing on value-added agricultural products and premium personal care; expanding the FMCG footprint through omni-channel distribution.

Market Share & Ranking

ITC is the largest cigarette manufacturer and seller in India and holds a leading position in the paperboards and specialty packaging segments.

Strategic Alliances

Joint ventures include ITC Filtrona Limited (50% ownership) and Logix Developers Private Limited (27.9% ownership).

🌍 External Factors

Industry Trends

The cigarette industry faces a stable tax regime currently, which supports revenue growth. The FMCG industry is seeing a shift toward staples and convenience foods, while the paperboard industry is facing temporary margin pressure.

Competitive Landscape

Faces competition from unorganized tobacco players and global/domestic FMCG giants like HUL and Nestle in the 'Others' segment.

Competitive Moat

The moat is built on a dominant market share in cigarettes (78% of EBIT), a massive distribution network, and deep backward integration into agri-sourcing. These are sustainable due to high entry barriers in tobacco and the scale of the agri-supply chain.

Macro Economic Sensitivity

Sensitive to agricultural output (climate-dependent) and domestic consumption trends. Excessive rains in Q2 FY2026 impacted FMCG-Others operations.

Consumer Behavior

Increasing demand for staples, dairy, and premium personal care products is driving growth in the FMCG-Others segment.

Geopolitical Risks

Exposed to trade restrictions on agricultural commodities and disruptions in international markets (e.g., Nepal operations were resilient despite disruptions in September 2025).

⚖️ Regulatory & Governance

Industry Regulations

Highly regulated cigarette industry; any material change in government policy regarding tobacco sales or health warnings can significantly impact profitability.

Environmental Compliance

Exposed to risks regarding plastic packaging restrictions and manufacturing discharge norms; the company is seeking eco-friendly packaging alternatives.

Taxation Policy Impact

Cigarettes are subject to stringent taxation and statutory compliance. The transition to a new GST regime in certain segments posed operational challenges in late 2025.

Legal Contingencies

Not disclosed in specific INR values, though the company monitors regulatory developments in the cigarette industry as a primary risk factor.

⚠️ Risk Analysis

Key Uncertainties

Regulatory changes in tobacco (high impact on 78% of EBIT), climate change affecting agri-inputs, and commodity price volatility in the FMCG segment.

Geographic Concentration Risk

Concentrated in India, with sourcing across 22 states. International exposure includes Nepal (Surya Nepal Private Limited).

Third Party Dependencies

Dependence on a network of farmers for 3.5 million tonnes of agri-commodities and contractual labor for manufacturing and services.

Technology Obsolescence Risk

The company is addressing digital transformation through its 'Others' segment (ITC Infotech) and IT solutions for internal business synergies.

Credit & Counterparty Risk

Superior liquidity with over INR 20,000 Cr in free cash and liquid investments as of March 31, 2025, ensures minimal counterparty risk.