ITC Shares Climb Over 4% After Q1 Results Despite Profit Decline. What's Driving The Rally?

ITC Share Price Today- FMCG giant ITC share price traded higher on Monday even after the company reported weaker June-quarter earnings.

The stock rose as much as 4.11% to an intraday high of ₹292.55 after opening at ₹284.45, against Friday's closing price of ₹281. At 11:15 am, the stock was trading at ₹289.85, up ₹8.85, or 3.15%. In comparison, the Nifty 50 was up around 0.8%.

The move made ITC one of the top gainers on the benchmark index during the session.

ITC Q1 FY 2026-27 Results Snapshot

ITC reported a consolidated net profit of ₹4,508.79 crore for the quarter ended June 30, 2026, down 15.6% from ₹5,340.66 crore in the corresponding period last year.

Excluding the one-time gain from the revaluation of its investment in Sproutlife Foods, profit stood at ₹4,103 crore, a decline of 23.2% year-on-year.

Revenue from operations increased 27.6% to ₹29,523.30 crore, compared with ₹23,130 crore in the year-ago period.

The company said earnings were impacted by the recent increase in cigarette taxes and weakness in the agri business during the quarter.

ITC Share Price Reaction

Despite the decline in profit, the stock attracted buying after the results.

Market participants tracked cigarette volumes closely following the recent tax hike. While earnings from the cigarettes business remained under pressure, volume performance was better than several estimates, easing concerns over a sharper slowdown in demand.

Revenue growth also remained healthy during the quarter, while the company continued with calibrated price increases across the cigarette portfolio.

Should you Buy, Sell or Hold the Stock?

Research Firm Kotak neo has maintained its BUY recommendation on ITC while revising its fair value to ₹360 from ₹365.

The firm said the June-quarter earnings came in slightly below its estimates, mainly because of weaker profitability in the cigarettes business after the recent tax changes.

However, it highlighted that cigarette volumes declined by around 5%, compared with its earlier expectation of a 9% decline. The brokerage said this indicates demand has remained relatively resilient despite higher prices.

Kotak Neo Research expects pressure on the cigarettes business to ease gradually over the coming quarters as the company continues with calibrated price increases. It has lowered its FY27 earnings estimate by around 5%, while making only limited changes to its FY28 and FY29 forecasts.

Kotak believes ITC's longer-term earnings outlook remains intact despite the weaker June-quarter performance.

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