ITC shares rise after Q2 results despite decline in profit
The conglomerate reported a consolidated net profit of ₹4,229.33 crore for the September quarter as expenses surged.
ITC shares rose over 1 per cent on Tuesday, 3 November, after the company reported its Q2 FY27 results, according to Mint. The diversified conglomerate's consolidated net profit fell 18.45 per cent year-on-year to ₹4,229.33 crore in the September quarter, compared to ₹5,186.55 crore in the same period last year.
Revenue from operations for the quarter increased 43.85 per cent year-on-year to ₹30,578.4 crore. However, total expenses for the company surged 69.6 per cent to ₹25,462.44 crore during the period.
The company stated that its non-cigarette FMCG business recorded its fourth consecutive quarter of double-digit revenue growth. ITC also reported recovery in its paper segment and growth in its agriculture business, despite trade disruptions from tensions in West Asia.
ITC noted that the operating environment remained uncertain due to geopolitical tensions, higher freight costs, and elevated crude oil prices. The company also highlighted intensifying global inflationary pressures and a rise in headline inflation in India.
Regarding investment outlook, Axis Direct maintained a HOLD rating and lowered its target price from ₹285 to ₹260, citing tax hikes in the cigarette business. Conversely, Nuvama Institutional Equities upgraded ITC to BUY from HOLD and retained a target price of ₹310.
Gaurav Arora, Head of Research at SAHI, said the stock is testing an upper boundary near ₹270. He noted that a breakout above ₹270 could lead to further upside towards ₹295 in the near term.