FMCG major ITC Ltd. announced its consolidated financial results for the first quarter of fiscal year 2027, ending June 30, 2026. The company recorded a 16.21 percent year-on-year (YoY) fall in net profit, settling at ₹4,394.13 crore. This is a significant drop from the ₹5,244.20 crore profit reported in the corresponding period last year.
Revenue Growth Driven by FMCG
Despite the dip in profit, ITC's revenue from operations demonstrated strong growth, climbing 27.64 percent YoY to ₹29,523.30 crore for Q1 FY27, up from ₹23,129.35 crore in the year-ago quarter. The company attributed this robust performance largely to its Fast-Moving Consumer Goods (FMCG) segment, which saw its revenue increase by 12 percent YoY.
Agri Business Faces Headwinds
Conversely, the agri business segment faced considerable challenges during the quarter. ITC noted that its performance was adversely affected by ongoing geopolitical developments and a high base effect from the previous year. These factors contributed significantly to the overall decline in the company's profitability.
Macroeconomic Environment and Outlook
ITC highlighted a heightened sense of uncertainty in the operating environment for Q1 FY27. The company specifically pointed to the ongoing conflict in West Asia, which has led to sharp increases and volatility in crude oil prices and related products, alongside significant disruptions in trade and supply chains globally.
- Consumption Demand: Both rural and urban markets in India showed resilient consumption demand during the quarter.
- Key Watch-outs: Imported inflation remains a primary concern in the near term. India is also experiencing a significant monsoon deficit and lower Kharif sowing levels compared to last year, with spatial and temporal variations in monsoon patterns requiring close monitoring.
- External Risks: A prolonged conflict in West Asia, coupled with emerging El Niño conditions that could weaken monsoons and intensify heatwaves, poses potential risks to economic growth, inflation, and the current account balance.
However, ITC also expressed optimism regarding India's macroeconomic fundamentals, citing their resilience supported by proactive government policies. Sustained public capital expenditure, stable monetary conditions, and measures to boost credit growth and attract foreign capital are expected to foster continued economic growth.
Market Reaction
The company's Q1 results were announced after market hours on Friday. Earlier in the day, shares of ITC had closed 1.51 percent lower at ₹280.95 on the BSE.