ITC's Strong Revenue Growth Masked by Sharp Profit Decline
ITC's first-quarter revenue jumped 27.6% year-on-year, but profit fell sharply, compressing net profit margins.
ITC reported a robust 27.6% YoY revenue increase for Q1 FY27, yet profit declined by 15.6%. This divergence highlights significant pressure on profitability.
ITC delivered a quarter of stark contrasts. The FMCG major posted a strong 27.6% year-on-year jump in revenue for the quarter ended June 2026, but this top-line momentum was overshadowed by a sharp 15.6% decline in profit. The result points to significant pressure on profitability, with net profit margin falling to 15.3% from 23.1% a year ago.
The sequential story is similar. Revenue grew nearly 24% from the previous quarter (Q4 FY26), yet profit fell by 17.6%. This divergence suggests rising costs or other headwinds are eroding the benefits of higher sales. Over the trailing twelve months (TTM), the company's net profit margin stands at a healthier 21.0%, indicating the latest quarter's margin is a notable dip from recent performance.
A look at the last five quarters shows a clear trend of expanding revenue but contracting profits and margins.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Period Ended | June 2026 | March 2026 | June 2025 |
| Revenue (₹ Cr) | 29,523.3YoY +28% | 23,821.48 | 23,129.35 |
| Profit (₹ Cr) | 4,508.79YoY -16% | 5,469.74 | 5,343.41 |
| Net Profit Margin (%) | 15.3YoY -34% | 23.0 | 23.1 |
Key Points
- The company maintains a strong balance sheet with minimal debt (Debt-to-Equity of 0.03) and robust returns, evidenced by an ROE of 29.67%.
- The stock has faced headwinds, declining 32.4% over the past year, which has brought its valuation (P/E of 17.4) largely in line with the industry average.
The immediate challenge for ITC is clear: translating its impressive revenue growth back into stronger bottom-line earnings in the coming quarters.
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· ITC
(BSE)
ISIN: INE154A01025
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