ITC (ITC IN) – Q4FY26 Result Update – Cigarette excise impact yet to play out – REDUCE
Published on 21 May 2026
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 do well in FMCG given low base although margin headwinds in medium term look likely. Paper business will gain due to benefits of MIP and gains from softer wood prices. We estimate 4.8% EPS CAGR over FY26-28 (Ex century paper). We assign SOTP based TP of INR302. Retain reduce as cigarette excise impact is yet to play out fully.
