Search

Cookies

We use cookies to improve your experience. By continuing, you accept our use of cookies.

  • Home
  • Business
  • ITC Shares Near 52-Week Low Ahead of Q2 Earnings; Brokerages Forecast Profit Drop

Business

ITC Shares Near 52-Week Low Ahead of Q2 Earnings; Brokerages Forecast Profit Drop

· · 2 min read

ITC shares are trading near a 52-week low of Rs 252.80 ahead of its Q2 earnings report on November 2. Brokerages like YES Securities and Emkay Global anticipate a significant drop in net profit and revenue, largely due to increased tobacco taxes.

ITC Ltd. is poised to release its second-quarter (Q2) earnings on November 2, with its stock currently hovering near a 52-week low. The FMCG conglomerate's shares were trading at Rs 262.50 in the current session, close to the Rs 252.80 low recorded on October 28. The company's market capitalization stands at Rs 3.32 lakh crore.

The stock has been in a notable downtrend for the past three years, heavily impacted by a significant hike in tobacco taxes implemented in January 2026. This regulatory change has contributed to the stock's 43% decline over the last two years and a 28% fall in 2026 alone.

Brokerage Expectations for ITC's Q2 Performance

Several financial institutions have released their projections for ITC's Q2 results, largely forecasting a challenging period driven by the performance of its cigarette segment.

YES Securities Forecast

  • Net Profit: Expected to fall 22.9% year-on-year to Rs 3,925.8 crore.
  • Revenue: Projected to decline 3.5% to Rs 17,394 crore.
  • EBITDA: Anticipated to drop by 23.5% year-on-year to Rs 4,783.3 crore.
  • Cigarette Volumes: Predicted to see a 6.0% decline.
  • Other Segments: Other-FMCG, PPP (Paperboards, Paper & Packaging), and Agri Business revenues are expected to show growth of 11.5%, 9.0%, and 35.0% respectively.
  • Margins: Gross margins are forecasted to contract by 460 basis points (bps) to 50.0%, while the EBITDA margin is expected to shrink by 720 bps to 27.5%.

Emkay Global Projections

  • Net Sales: Expected to grow by 3% year-on-year.
  • EBITDA: Likely to decline over 15%, primarily due to the drag from the cigarettes segment.
  • Cigarette Business: Net sales are predicted to fall 21%, leading to a 29% decline in Earnings Before Interest and Taxes (EBIT) due to an unprecedented excise duty hike effective February 1, 2026.
  • Other FMCG: Revenue growth of 13% and EBITDA growth of 8% year-on-year.
  • Agri Business: Expected to report 6% year-on-year revenue growth.
  • Paperboards and Packaging: Anticipated to deliver 30% revenue growth, including the impact of the Century acquisition for two months.
  • Overall EBITDA: Projected to decline by 18% year-on-year.

The consensus among brokerages points to significant pressure on ITC's profitability, largely stemming from the challenges faced by its core cigarette business following the recent tax increases.

Related