Cigarettes still make 74% of ITC's profit despite a sharp fall in sales

• ITC reported around 26% drop to ₹2343 crore in its standalone profit for the first quarter ended June 30.
• There was some cushion from agri business and packaged food but they are too small segments for ITC.
• The profit from non-cigarette FMCG products was 1.6 times compared to year earlier but it was a measly ₹125 crore.

Year after year, there are reports about how ITC wants to shift focus away from cigarettes. The COVID-19 lockdown managed to achieve some of it as production was stalled and supply came to a grinding halt in most places.

Still, more than 74% of the company's standalone profit before tax came from the cigarettes segment. It was 87% in the same period a year earlier.

However, at a time when an economic crisis has dried up profit from everywhere else, ITC won't complain about the resilience of cigarettes. The sales for the April-June 2020 was still down about 30% year-on-year.

The big picture looks pretty bleak for ITC

The Indian multinational conglomerate ITC reported around 26% drop to ₹2343 crore in its standalone profit for the first quarter ended June 30.

Paper and packaging business— which contributed 10% of the revenue a year ago⁠— was down by a third and it was a complete washout of revenue from the hotels segment, which also clocked a loss of over ₹242 crore (before tax).

However, the numbers are still better than what analysts had predicted. According to various analysts reports, ITC was projected to see a profit dip of nearly 35%.


The company shares fell nearly a percent ahead of the earnings.

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