Cigarette tax pressure clouds second quarter outlook
ITC is expected to report a weak September quarter, with cigarette volumes forecast to fall around 8% and operating profit potentially declining 29% after tax changes. FMCG and paper growth may partly offset pressure on consolidated margins.
pre-market2 sources ↓machine-written, see hownot a recommendation
- ITC close
- ₹265.60
- On the day
- +0.23%
- Futures OI, long build-up
- +3.3%
- Put-call ratio
- 0.65
- Max pain
- ₹265.00
ITC is set to announce its September-quarter results on 02 Nov 2026, with the cigarette business expected to remain the key swing factor. Analysts see cigarette volumes falling around 8% year on year after the introduction of a new tax regime, while higher taxes and limited price increases are expected to pressure profitability. The FMCG and paper businesses may provide some support, but the overall result is likely to reflect weaker cigarette operating performance 📉.
Key Points:
• HDFC Securities expects consolidated revenue to grow 7% year on year, while EBITDA may decline 24% because of weaker margins across segments. It also expects consolidated segment EBIT to fall 20%.
• Nuvama Equities forecasts a 3% year-on-year decline in consolidated revenue and a 20% fall in EBITDA, with the EBITDA margin contracting by 619 basis points to around 28.5%.
• Cigarette operating profit could decline as much as 29%, according to the Economic Times report, while FMCG may record double-digit EBIT growth with broadly flat margins.
• OI Charts data showed the shares at ₹265.60 on 30 Oct 2026, up 0.23% for the session. The stock gained 1.4% over five sessions but remained 37.7% below its 52-week high of ₹426.40. Volume was 16,297,263 shares.
• In derivatives, futures open interest rose 3.3% in a long build-up, with futures trading at a 0.94% premium. The put-call ratio was 0.65, indicating relatively greater call open interest around the tracked expiry.
The contrasting revenue estimates show that the cigarette decline and subdued agricultural operations could offset growth in FMCG and paper. The immediate market reaction will depend on actual cigarette volumes, price increases, segment margins and management commentary on the tax impact. FMCG performance remains important because stronger consumer-goods growth could cushion the earnings pressure 🛒, while the paper business could offer a secondary support channel.
For the 23 Nov 2026 expiry, OI Charts data placed max pain at ₹265.00, with the largest call open interest at ₹265.00 and the largest put open interest at ₹250.00. These levels frame the near-term derivatives positioning, while the results announcement and subsequent management outlook will determine whether the recent stabilisation in the share price extends. The stock had closed near its 52-week low of ₹252.80 recorded on 28 Oct 2026, keeping downside risk and earnings sensitivity in focus.
Source: Livemint and Economic Times, 01 Nov 2026
Not investment advice. For informational purposes only.