ITC Ltd. shares gained almost 3% in early trade on Monday, climbing to Rs 289.25 after closing at Rs 281 on Friday. The rise came despite the company’s June‑quarter results, which showed a 27.1% drop in net profit to Rs 3,578.8 crore and a 14.4% fall in revenue to Rs 16,908 crore.
The stock is still 22.8% lower for 2026, compared with a 6.8% decline in the Nifty 50. ITC’s market capitalisation exceeds Rs 2.4 lakh crore. The earnings miss was driven mainly by a sharp tax hike on cigarettes, which cut cigarette EBIT by 35%.
Brokerages remain positive for the long term. CLSA keeps an Outperform rating and a target of Rs 388, implying a 38% upside from Friday’s close. Nomura upgraded ITC to Buy with a target of Rs 340, noting that cigarette volumes fell only about 5% year‑on‑year, better than its 10% estimate.
Kotak Institutional Equities also rates the stock Buy, setting a target of Rs 360. It says cigarette volumes held up better than expected, thanks to a portfolio strategy that protects against illicit trade. The brokerage cut its FY27 EPS estimate by 5% but expects EBIT decline to moderate.
JPMorgan maintains a Neutral rating and a target of Rs 310. It sees the earnings miss as a result of weaker cigarette profitability and expects EBIT per stick to recover by Q4 of FY27. HSBC holds a Hold rating with a target of Rs 320, estimating a 5‑6% drop in cigarette volumes and a near‑flat EBIT decline by Q4 FY27.
Macquarie keeps a Neutral rating and a target of Rs 300. It notes that higher cigarette taxes and weak agri‑business profitability contributed to the earnings miss, and the timing of a full recovery in cigarette profitability remains uncertain.