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ITC Ltd reported a 15.6 per cent year-on-year decline in its consolidated net profit for the first quarter of FY27 as a sharp rise in expenses weighed on earnings despite strong revenue growth. The company recorded double-digit growth in revenue from operations, supported by robust performance across its businesses and group companies. ITC also highlighted continued resilience in rural and urban demand but cautioned that imported inflation, geopolitical tensions in West Asia, monsoon variability and emerging El Niño conditions remain key risks for the Indian economy and business environment.
ITC Ltd reported a 15.6 per cent year-on-year decline in its consolidated net profit for the first quarter of FY27, mainly due to a sharp increase in expenses during the quarter. The Kolkata-headquartered diversified conglomerate posted a consolidated profit of INR 4,508.79 crore, compared with INR 5,343.41 crore in the corresponding quarter of the previous financial year, according to its regulatory filing.
Despite the decline in profit, the company recorded healthy growth in revenue. Revenue from the sale of products rose 27.82 per cent year-on-year to INR 29,409.82 crore during the June quarter. Revenue from operations increased 27.64 per cent to INR 29,523.30 crore, compared with INR 23,129.35 crore in the same period last year.
The company stated that the first quarter of FY27 was affected by increased uncertainty in the operating environment due to the ongoing conflict in West Asia. It said the geopolitical situation resulted in a sharp rise and continued volatility in crude oil and crude-linked product prices, while also disrupting global trade routes and supply chains.
ITC added that its group companies delivered a robust performance during the quarter, with growth led by ITC Infotech, Surya Nepal, Sproutlife Foods and ITC Hotels. The demerger and separate listing of ITC Hotels earlier this year has enabled the hospitality business to operate independently while continuing to remain part of the broader ITC group ecosystem.
The company's total expenses increased 48 per cent year-on-year to INR 24,809.95 crore, which impacted overall profitability. Meanwhile, total consolidated income, including other income, stood at INR 30,179.01 crore, registering a 26.74 per cent increase over the corresponding quarter of the previous year.
Commenting on consumption trends, ITC said demand across both rural and urban markets remained resilient during the quarter. However, it noted that imported inflation continues to be an important factor to monitor in the near term. The company also pointed out that India is experiencing a significant monsoon deficit and lower kharif sowing levels compared with the same period last year, which could influence rural demand and agricultural output if conditions persist.
ITC further stated that spatial and temporal variations in the monsoon will remain an important factor to watch. It added that a prolonged conflict in West Asia, coupled with emerging El Niño conditions that may weaken the monsoon and intensify heatwaves, could affect economic growth, inflation and the country's current account balance.
At the same time, the company maintained that India's macroeconomic fundamentals continue to remain resilient. It said proactive policy measures by the Government of India, including sustained public capital expenditure, stable monetary conditions, banking and liquidity support to boost credit growth, and initiatives aimed at attracting foreign capital, reducing foreign exchange volatility and strengthening investment activity, are expected to support long-term economic growth.
ITC has continued to diversify beyond its traditional cigarettes business over the past several years by strengthening its presence across fast-moving consumer goods, hotels, paperboards and packaging, agri-business and information technology services. This diversified business model has helped the company maintain steady revenue growth despite sector-specific challenges and fluctuations in input costs.
Shares of ITC Ltd ended the trading session at INR 280.95 on the BSE, down 1.51 per cent from the previous close.
Source PTI
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