ITC shares in focus after Q1 profit rises 3% YoY to Rs 5,244 crore. Should you buy, sell or hold?

Shares of FMCG major ITC will be in focus on Monday after the company reported a 3% year-on-year (YoY) rise in its consolidated net profit to Rs 5,244 crore for the June quarter, compared to Rs 5,092 crore in the same period last year.

The company reported revenue from operations at Rs 23,129 crore in the quarter under review, up 19.5% from Rs 19,350 crore in the corresponding quarter of the previous financial year.

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Segment revenue

- FMCG (including Cigarettes): Revenue rose to Rs 15,354 crore in Q1FY26, up from Rs 14,341 crore in Q1FY25 and Rs 14,732 crore in Q4FY25. Cigarette revenue specifically grew to Rs 9,554 crore from Rs 8,842 crore a year ago and Rs 9,229 crore in the previous quarter.

- Agri Business: Revenue surged to Rs 9,724 crore in Q1FY26, compared to Rs 6,998 crore in Q1FY25 and Rs 3,695 crore in Q4FY25.

- Paperboards, Paper & Packaging: Revenue increased to Rs 2,117 crore, up from Rs 1,977 crore in Q1FY25, but slightly down from Rs 2,189 crore in Q4FY25.

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Should you buy, sell, or hold ITC's stock? Here’s what brokerages say:

Antique

Antique has raised ITC’s target price to Rs 502 from Rs 497 while maintaining a 'Buy' rating.

The brokerage highlighted strong cigarette volume growth, with expectations of margin expansion. While the FMCG growth momentum has improved, near-term margin pressures have led to an 11% cut in FY26 and a 4% cut in FY27 EBITDA estimates, respectively. The agri business remains robust, and the paper division continues to benefit from a favourable base. The revised target price is based on first-half FY28 estimates.

Avendus

Avendus trimmed ITC's target price to Rs 550 from Rs 555, retaining its 'Buy' rating.

The brokerage revised revenue estimates slightly upwards but adjusted margins lower for FY26 and FY27. It flagged cigarette market share trends for close monitoring. Avendus expects a gradual recovery driven by rural demand and easing input costs, though strong agri growth is impacting blended margins. Despite these challenges, the core business remains resilient, supporting a positive outlook.

Motilal Oswal (MOFS)

MOFS has cut ITC's target price to Rs 500 from Rs 515, maintaining its 'Buy' rating.

The firm noted a 6% rise in cigarette volumes, though FMCG and paper segments face margin pressures. Stable cigarette taxes provide a supportive outlook. MOFS expects FMCG recovery in the coming quarters and models a 5% revenue CAGR for FY26-27. For FY26-28, overall revenue CAGR is estimated at 11%. A valuation re-rating could follow if cigarette growth sustains and FMCG rebounds.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)