ITC shares gain modestly after Q2 results; analysts split on outlook

Shares of ITC Limited edged higher on Tuesday, trading at ₹268.65 on the NSE at 12.30 pm, up 0.84 per cent from the previous close of ₹266.40, as investors digested the conglomerate’s second-quarter results released a day earlier. The stock opened at ₹269.05, touched an intraday high of ₹270.60 and a low of ₹264.75, with traded volume crossing 1.8 crore shares worth approximately ₹481.90 crore by midday.

The move comes against a backdrop of significant underperformance. ITC has fallen nearly 35 per cent over the past year compared to a decline of about 8 per cent for the Nifty 50, and is down roughly 26 per cent year-to-date. The stock hit a 52-week low of ₹252.80 just last week on October 28, and remains well off its 52-week high of ₹421.65 recorded a year ago.

Analyst views following Monday’s Q2FY27 results were cautiously mixed. HDFC Securities maintained an ADD rating with a target price of ₹300, calling the non-cigarette performance a bright spot while flagging that cigarette profitability recovery hinges on volume uptick. JM Financial also retained ADD but trimmed its target to ₹305 from ₹320, citing broader sector de-rating, though it noted the stock at current levels offers a dividend yield of around 5 per cent. Motilal Oswal held a Neutral rating with a target of ₹285, arguing that earnings pressure from the cigarette segment would continue to offset recovery in FMCG and paper divisions.

ITC’s Q2FY27 results showed consolidated revenue rising 3.9 per cent year-on-year to ₹20,269 crore. However, EBITDA fell 15.7 per cent to ₹5,645 crore as cigarette net sales dropped 21 per cent following an unprecedented hike in excise duty and GST effective February 2026. Cigarette volumes declined approximately 8 per cent. The FMCG segment was the standout, with revenue up 19 per cent and EBIT rising 31 per cent, with the digital-first and organic portfolio posting over 70 per cent annual recurring revenue growth.

Separately, ITC’s board on Monday also approved the amalgamation of Sproutlife Foods Private Limited, the maker of health brand Yoga Bar, with itself, a move intended to simplify its corporate structure and consolidate financial resources. No fresh shares will be issued as Sproutlife is a wholly owned subsidiary.