Shares of diversified fast-moving consumer goods (FMCG) major ITC continued to gain for the second consecutive day on Wednesday, even as the company reported a decline in its consolidated profit for the September quarter of FY 2026-27 due to higher expenses.
The stock opened in the green at Rs 273.80 against the previous close of Rs 273.35 on the BSE. Amid a volume surge of more than 2.36 times, the stock gained to touch a high of Rs 283.50, up Rs 10.15, or 3.71 per cent, from the previous close. Last seen, the stock traded at Rs 281, up Rs 7.65, or 2.80 per cent. The market cap of the company stood at Rs 3,52,146.74 crore.
What’s behind the rally?
The rally continues as several brokerages have given a BUY call and revised the target price to Rs 406.
“ITC’s diversified business portfolio, strong FMCG growth, improving paper segment performance and expansion in value-added products support its medium-term growth prospects. The non-cigarette businesses are expected to remain key growth drivers, supported by premiumisation, distribution expansion and new product launches…Accordingly, we expect Revenue/EBITDA/PAT to register a CAGR of 7.2%/5.1%/4.8% over FY26-28E and maintain our BUY rating with a revised target price of Rs 408,” Religare said in a report.
Similarly, Elara Securities has given the stock an Accumulate rating with a target price of Rs 290.
“We reiterate Accumulate and a lower SOTP-based TP of INR 290 from INR 320, valuing the cigarettes business on 13x (unchanged) March 2028E P/E and the FMCG business on 4.0x (from 5.5x) FY28E price/sales,” the report said.
ITC quarterly results
The company has reported an 18.45 per cent decline in its consolidated profit to Rs 4,229.33 crore for the September quarter of FY 2026-27 due to higher expenses.
It had posted a consolidated profit of Rs 5,186.55 crore in the July-September period a year ago, according to a regulatory filing by the Kolkata-headquartered company.
Its revenue from operations stood at Rs 30,578.4 crore, up 43.85 per cent in the second quarter of FY27, compared to Rs 21.255.86 crore a year ago.
ITC’s total expenses stood at Rs 25,462.44 crore, up 69.6 per cent YoY in the September quarter. Its total consolidated income, including other income, was Rs 31,085.76 crore, up 42.33 per cent in Q2 FY27.