ITC Q1 FY27 profit drops 27% as margin pressure offsets 28% revenue growth
ITC reported Q1 FY27 net profit of ₹3,579 crore, down 27% year-on-year, while revenue from operations rose 28% to ₹26,943 crore. EBITDA fell 27.9% to ₹4,514 crore and margin contracted to 26.7% from 31.7%, amid crude-linked input inflation and supply disruptions.
What happened
ITC Limited · ITC’s Q1 FY27 profit fell 27% to ₹3,579 crore despite 28% revenue growth, as West Asia-linked crude inflation and supply disruptions squeezed
Key facts
- Q1 FY27 net profit: ₹3,579 crore, down 27% YoY
- Revenue from operations: ₹26,943 crore, up 28% YoY
- Year-ago revenue: ₹21,694 crore
- EBITDA: ₹4,514 crore, down 27.9% YoY
- Year-ago EBITDA: ₹6,261 crore
- EBITDA margin: 26.7%, versus 31.7% YoY
- Share price: ₹281, down 1.4% before results
- FMCG market target: ₹8 lakh crore by 2035
Why this matters
The margin squeeze highlights strategic value in acquisitions or partnerships that strengthen supply-chain control, secure key inputs and add higher-margin growth platforms.
What to watch
- Sequential change in EBITDA margin and management guidance on the timing of recovery.
- Crude oil, polymers, paperboard, palm oil, wheat, milk, leaf tobacco and freight-price trends.
- Evidence of FMCG price hikes, SKU rationalization, grammage changes or reduced promotional activity.
- Volume growth and market-share movement in cigarettes, biscuits, snacks, personal care, staples and dairy.
- Inventory levels, stock-outs, supplier lead times and commentary on supply disruption normalization.
- Competitive pricing actions from large FMCG peers and private-label expansion.
- Rural demand, urban discretionary consumption and monsoon-linked agricultural income trends.
- Implement calibrated price hikes and reduce promotional intensity in categories where brand equity supports pass-through.
- Prioritize premium SKUs, larger packs and channel mix improvements to defend contribution margins without sharply damaging volumes.
- Lock in or hedge key crude-linked packaging, freight and commodity exposures where feasible.
- Diversify suppliers and increase localized sourcing to reduce disruption risk and expedite inventory replenishment.
- Tighten overhead, marketing and trade-spend allocation toward faster-growing, higher-return FMCG franchises.
- Use tobacco cash flows to protect strategic FMCG distribution expansion, while avoiding broad-based discounting.