Kolkata, Jul 31 (PTI) Diversified conglomerate ITC Ltd on Friday reported a 15.6 per cent decline in its consolidated profit for the June 2026 quarter to Rs 4,508.79 crore, as higher expenses and the impact of a sharp increase in excise duty on cigarettes weighed on profitability, even as its non-cigarette FMCG business delivered strong double-digit growth.

The Kolkata-headquartered company posted a consolidated profit of Rs 5,343.41 crore in the April-June quarter a year ago, according to a regulatory filing.

Revenue from operations rose 27.64 per cent to Rs 29,523.3 crore in the first quarter of FY27 from Rs 23,129.35 crore a year earlier, while revenue from the sale of products increased 27.82 per cent to Rs 29,409.82 crore.

The company said the quarter was marked by heightened uncertainty in the operating environment due to the ongoing conflict in West Asia, which triggered a sharp increase and volatility in crude oil and crude-linked commodity prices, besides causing significant trade and supply chain disruptions.

ITC's total expenses jumped 48 per cent year-on-year to Rs 24,809.95 crore during the quarter. Total consolidated income, including other income, rose 26.74 per cent to Rs 30,179.01 crore.

The company also flagged the impact of a steep hike in excise duty on cigarettes during the quarter, saying it adopted a calibrated strategy to protect market share and limit migration to illicit trade.

ITC said it implemented more than 30 interventions in a short span to re-architect and strengthen its cigarette portfolio across price points, including value-accretive offerings and leveraging key trademarks.

According to the company, staggered and agile pricing actions helped protect its consumer franchise while mitigating the risk of volume migration to illicit trade. However, the company did not clarify whether the entire burden of the higher excise duty had been passed on to consumers.

The higher excise incidence also impacted profitability during the quarter.

Meanwhile, the company's non-cigarette FMCG business continued to deliver strong growth.

Revenue from the FMCG-Others segment rose 15 per cent year-on-year to Rs 6,687 crore, driven by robust demand across packaged foods, dairy products and personal care categories.

Profit before interest and taxes (PBIT) for the segment increased 21 per cent to Rs 485 crore, while segment EBITDA margin expanded by 55 basis points year-on-year, excluding the impact of Sresta Natural Bioproducts.

Category-wise, dairy, snacks, noodles and frozen snacks recorded growth of over 20 per cent during the quarter. Personal care products posted mid-teen growth, while notebook sales witnessed a strong rebound aided by premiumisation.

The company's digital-first and organic products portfolio achieved an annual revenue run rate of around Rs 1,500 crore.

ITC said inflation in key raw materials such as fuel, edible oil, soap noodles and packaging materials, driven by the West Asia conflict, was mitigated through strategic inventory cover, commodity hedging and price-volume rebalancing initiatives.

On the broader business environment, the company said demand across both rural and urban markets remained resilient during the quarter, although imported inflation remains a key concern in the near term.

India is currently witnessing a significant monsoon deficit and lower kharif sowing levels compared with the corresponding period last year.

"Additionally, spatial and temporal variations in monsoon would remain a key monitorable. A protracted conflict in West Asia, alongside emerging El Nino conditions that may weaken monsoons and intensify heatwaves, could weigh on growth, inflation and the current account," ITC said.

The company, however, maintained that India's macroeconomic fundamentals remain resilient, supported by proactive policy measures, sustained public capital expenditure, stable monetary conditions and initiatives to attract foreign investment.

ITC also highlighted the robust performance of its group companies, led by ITC Infotech, Surya Nepal, Sproutlife Foods and ITC Hotels.

Shares of ITC Ltd settled 1.51 per cent lower at Rs 280.95 apiece on the BSE. PTI BSM NN

Excise duty increases on cigarettes pressured profitability, while calibrated pricing and FMCG growth supported market resilience. Excise duty increases on cigarettes affected consolidated profitability, prompting calibrated pricing and portfolio measures to protect market share and limit migration to illicit trade. The cigarette portfolio was re-architected across price points through value-accretive offerings and staggered pricing actions. Non-cigarette FMCG growth was supported by demand for packaged foods, dairy and personal-care products. Input-cost inflation was mitigated through inventory cover, commodity hedging and price-volume rebalancing amid crude-price volatility, supply-chain disruption and imported inflation concerns.