The FMCG – Others segment continued its revenue growth momentum despite operational challenges during the quarter, recording an 8% year-on-year growth (excluding notebooks). The business faced short-term disruptions due to excessive rains across several regions and the transition to the new GST regime. Growth was led by staples, dairy, premium personal wash, and agarbattis, while the premium portfolio and NewGen channels continued to perform strongly.
The notebooks business remained under pressure owing to low-priced paper imports and increased competition from local and regional players. Meanwhile, GST rates were reduced in over half of the FMCG portfolio, and the company passed on the benefits to consumers. The segment’s EBITDA margin improved by 50 basis points quarter-on-quarter, supported by smart revenue management, price-volume-value rebalancing, and focused cost optimisation amid input cost volatility.
The company said commodity prices remained high but stable, with the segment’s EBITDA margin at 10%, compared to 10.6% in Q2 FY25 and 9.4% in Q1 FY26. ITC maintained competitive levels of trade and marketing investments to support growth and market presence.
Additionally, the Digital-first and Organic portfolio recorded a healthy performance, achieving an annual recurring revenue (ARR) of approximately Rs 1,100 crore.
In the Cigarettes segment, net revenue rose 7% YoY, driven by strong performance in differentiated and premium offerings. Strategic portfolio initiatives and market interventions, particularly in competitive markets and to counter illicit trade, helped reinforce the company’s leadership position. Leaf tobacco consumption costs remained elevated, although procurement prices moderated in the current crop cycle.The Agri Business segment’s quarterly performance was affected by timing differences and a high base effect, though for the first half (H1), segment revenue grew 7% and segment results were up 10%. Growth was supported by the company’s crop development expertise, superior product quality, and strong customer relationships in leaf tobacco.However, value-added agri exports were subdued due to delayed call-offs from customers amid uncertainty around US tariffs. The company continues to focus on market development in new geographies and scaling up its sourcing and processing capabilities.
The Paperboards and Packaging segment delivered a sequential improvement in performance, with profit up 17% and margins expanding by 90 basis points quarter-on-quarter. Segment revenue rose 5% year-on-year, primarily driven by higher volumes. The broader industry, however, continues to be impacted by low-priced imports, high wood prices, and subdued realisations.
ITC said there were initial signs of moderation in wood prices due to improved availability. The government imposed a Minimum Import Price (MIP) on Virgin Multi-layer Paperboard effective August 22 while the Directorate General of Trade has also recommended anti-dumping duties on imports from China and Chile. Investigations are underway into possible dumping of paperboard from Indonesia.
The industry continues to engage with policymakers to seek further safeguard measures against low-priced imports of coated and uncoated paper.
The company is implementing strategic measures to improve wood availability, including accelerating plantations in core areas, developing new regions, collaborating with other wood-based industries, and using satellite-based monitoring systems for plantation management.