The FMCG business improved its performance last year, aided by the reduction in goods and services tax and a higher share of premium, high-margin product launches. In FY25, the packaged food business had grown 6% year-on-year, while consumer spending on its FMCG brands increased 4.6%. In FY26, consumer spending rose 9% year-on-year. The food business remains the largest contributor to ITC’s FMCG sales.
However, ITC’s other FMCG businesses, comprising education and stationery products, personal care, safety matches and agarbattis, grew marginally by 2% to Rs 3,810 crore. The company had said the education and stationery business was impacted by local competition in the first half of the last fiscal, although it improved “significantly” in the second half.
ITC said its strategic actions together with progressive improvement in the macroeconomic environment and consumer sentiment during the year — supported by measures such as income tax rate cuts, lower interest rates, reduction in GST rates and favourable monsoons — helped build momentum through the second half.
The company is the market leader in branded atta, the bridged segment of snack foods, cream biscuits and notebooks, while it is the second largest in instant noodles and incense sticks.
Meanwhile, ITC chairman and managing director Sanjiv Puri’s total remuneration fell 7% to Rs 23.91 crore in the last fiscal due to lower payouts of performance bonus, long-term incentives and commission. The company’s net profit grew less than 1% year-on-year to Rs 20,286 crore, while gross revenue rose 10% to Rs 80,867 crore. ITC’s earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 4.9% to Rs 25,208 crore in FY26.
ITC said the increase in cigarette taxation last February has emerged as a challenge providing further impetus to illicit trade and adversely impact millions of farmers, MSMEs, retailers and local value chains, while sub-optimising the sector’s revenue potential.
“The year ahead presents an extremely challenging operating environment in view of the unprecedented increase in taxation that will undoubtedly test the resilience and adaptability of legitimate players in the industry,” ITC said.
The company, however, said it remains confident of improving its market standing in the legal cigarette industry.
The GST rate on cigarettes was raised from 28% of transaction value to 40% of the retail sale price, along with a steep increase in excise duties following the phasing out of the compensation cess.