ITC Q1 profit falls 27% as margins compress, while FMCG grows 12%

ITC reported standalone net profit of ₹3,578.8 crore, down 27.1% year-on-year, as revenue declined and EBITDA margin narrowed to 26.7%. Its FMCG business grew 12%, with growth led by dairy, snacks and personal care; digital-first brands and fresh-food cloud kitchens continued to scale.

— Source publishedFri, 31 Jul, 2026, 17:10 IST·First seen Fri, 31 Jul, 2026, 17:17 IST·Source CNBC-TV18 · Companies

What happened

ITC Limited · ITC’s Q1 profit fell 27% as revenue and margins weakened, missing estimates. FMCG grew 12%, led by dairy, snacks and personal care, while digital

Key facts

  • Standalone net profit ₹3,578.8 crore, down 27.1% YoY
  • Revenue ₹16,908 crore, down 14.4% YoY
  • EBITDA ₹4,514 crore, down 27.9% YoY
  • EBITDA margin 26.7% versus 31.7% YoY
  • FMCG revenue growth 12%; excluding staples 16%
  • FMCG PBIT up 21% YoY; margin up 55 bps excluding Sresta
  • Digital-first and organic portfolio ARR around ₹1,500 crore
  • Fresh food GMV up 90% YoY; ARR crossed ₹300 crore
  • 75 cloud kitchens across five cities

Why this matters

ITC’s scaling digital-first brands and fresh-food cloud kitchens signal continued appetite for capability-led expansion in high-growth, convenience-oriented food and personal-care segments.

What to watch

  • Quarterly FMCG revenue growth sustaining above 10% versus a deceleration after the expansionary base period.
  • FMCG segment EBITDA margin, including whether scale benefits begin offsetting advertising, distribution and new-business costs.
  • Volume growth versus price-led growth in biscuits, snacks, dairy, staples and personal care.
  • Input-cost trends for edible oils, wheat, milk, paperboard, packaging materials and other agri commodities.
  • Market-share movement against HUL, Nestle India, Britannia, Tata Consumer, Dabur and regional food brands.
  • Quick-commerce sales contribution, repeat purchase metrics and economics of fresh-food/cloud-kitchen operations.
  • Any further decline in agri, paperboards or tobacco profitability that increases reliance on FMCG execution.
  • Management commentary on capital allocation, new brand launches and the timeline for digital-first brands to reach profitability.
  • Prioritize distribution expansion for dairy, snacks and personal care in high-frequency urban and semi-urban channels.
  • Increase quick-commerce assortment, pack-size innovation and digital advertising for digital-first FMCG brands.
  • Use cross-category bundling and ITC's retail/distribution network to lower customer-acquisition and shelf-placement costs.
  • Apply selective pricing and grammage actions where commodity inflation persists, while protecting entry price points.
  • Rationalize slower-moving SKUs and focus fresh-food/cloud-kitchen expansion on cities with proven repeat demand and unit economics.
  • Signal a clearer FMCG margin pathway through disclosure on segment profitability, premiumization and investment intensity.