Expenses during the quarter increased substantially on higher input costs.

| Photo Credit: bl-online Administrator

FMCG major ITC Ltd., for the first quarter ended June 30, 2026, reported a 27% YoY fall in standalone net profit to ₹3,579 crore on higher taxes on cigarettes and increased operational expenses during the quarter. The sharp decline on profit came on the government’s decision to increase excise duty and other taxes on cigarettes. Since this business contributes a major share of the company’s profit, the higher levies weighed on the margins.Although the company increased prices of cigarettes, the move could not fully offset the impact. Also the company witnesses a significant migration of volume to illicit trade due to the high taxes.Besides, expenses during the quarter increased substantially on higher input costs. However, the company’s standalone revenue from operations increased by 28% YoY to ₹26,943 crore reflecting healthy growth across its businesses which includes FMCG, agriculture, paperboards and packaging.Consolidated net profit fell 16% to ₹4,394 crore and revenue from operations grew 28% YoY to ₹29,523 crore.“Q1 FY27 was marked by heightened uncertainty in the operating environment due to the ongoing conflict in West Asia, that triggered a sharp increase & volatility in the price of crude oil & crude-linked products along with significant trade & supply chain disruptions,” the company said in a statement.“While consumption demand, both in rural and urban markets, remained resilient during the quarter, imported inflation is a key watch-out in the near-term,” it stated.“India is currently experiencing significant deficit in monsoon and lower Kharif sowing levels compared to the same period last year. Additionally, spatial and temporal variations in monsoon would remain a key monitorable,” it added.“A protracted conflict in West Asia, alongside emerging El Niño conditions that may weaken monsoons and intensify heatwaves, could weigh on growth, inflation and the Current Account,” it flagged. Published - July 31, 2026 08:01 pm IST