ITC's Q2 FY26 print landed exactly as management had signposted at the Investor Day in August: cigarette EBIT growth of 6.2% year-on-year, FMCG segment margin expansion, and the hotels demerger progressing to schedule for the January listing.
The number that matters most, in my view, is the FMCG segment margin. At 11.4%, it has now printed above 10% for six consecutive quarters. The consumer staples multiple that the market has historically been reluctant to apply to ITC's non-cigarette business is looking increasingly defensible.
The cigarettes machine keeps compounding
Six percent EBIT growth on a business that many market participants had written off as terminally challenged. Volume growth of 1.8% (positive for the fourth consecutive quarter), price-mix contribution the rest. The illicit cigarette share appears to have stabilised in the low 30s, which is a bigger deal than the topline reveals.