ITC's Q2 profit slips 18% despite strong revenue growth

ITC Ltd reported a contraction in profitability during the second quarter of the financial year, though the diversified conglomerate's top-line expansion reflected the strength of its growing portfolio beyond traditional tobacco operations.

The company's consolidated net profit fell to ₹4,229 crore in the quarter ended September 30, marking an 18.45 per cent decline from the same period last year. The profit squeeze came despite consolidated revenue expanding by 43.85 per cent, reflecting margin pressures from elevated cost structures across the business.

The divergence between revenue growth and profit decline underscores challenges facing the firm as it navigates inflationary pressures and increased operational expenses. However, the substantial rise in topline revenue demonstrates the traction gained by ITC's non-cigarette businesses, including hotels, agri-commodities, and fast-moving consumer goods divisions, which have become increasingly significant to overall performance.

The results reflect a broader trend among Indian conglomerates grappling with cost inflation while seeking growth through diversification beyond legacy operations. ITC's strategy of expanding higher-margin non-tobacco segments continues to shape its financial trajectory as it balances near-term profitability with longer-term portfolio transformation.