November 5, 2026
ITC Ltd reported a 14 per cent year-on-year increase in employee benefit expenses to Rs 1,886.52 crore in the second quarter of FY27, up from Rs 1,654.49 crore in the corresponding period last year. The rise of approximately Rs 232 crore came even as the diversified conglomerate witnessed a decline in its consolidated net profit.
The company’s consolidated net profit attributable to owners fell 18.7 per cent to Rs 4,168.40 crore in Q2 FY27, compared with Rs 5,126.11 crore in Q2 FY26. Meanwhile, consolidated net revenue grew 3.9 per cent year-on-year to Rs 20,269 crore.
ITC’s EBITDA declined 16.8 per cent to Rs 6,126.53 crore, while its operating profit margin narrowed to 27.85 per cent from 34.33 per cent in the year-ago quarter.
The higher employee expenditure was reported amid varied performances across the company’s business segments, with non-cigarette FMCG and paperboards businesses registering growth, while the cigarette segment continued to face challenges.
FMCG and paper businesses support growth
ITC’s non-cigarette FMCG segment recorded a 19.1 per cent increase in revenue to Rs 7,218.36 crore during the quarter. Segment profit before tax rose 31.4 per cent to Rs 576.69 crore.
According to the company, its FMCG business achieved double-digit revenue growth for the fourth consecutive quarter. Biscuits, snacks, noodles, spices, salt, frozen foods, homecare products and notebooks were among the categories contributing to the performance.
The paperboards, paper and packaging segment also reported a strong recovery, with revenue climbing 35.9 per cent year-on-year to Rs 3,017.45 crore. Segment profit increased 50.7 per cent to Rs 273.32 crore.
ITC’s agri business posted a 12.7 per cent rise in revenue to Rs 4,550.60 crore, while segment profit grew 14.3 per cent to Rs 518.41 crore.
However, the cigarette business remained under pressure, with segment profit declining 26 per cent to Rs 4,044.49 crore from Rs 5,462.10 crore in the corresponding quarter of the previous fiscal year. The company attributed the challenging business environment to the impact of changes in cigarette taxation.
While employee benefit expenses recorded substantial growth during the quarter, ITC’s financial disclosures did not specify the reasons behind the increase, leaving it unclear whether the rise was linked to salary revisions, additional hiring, changes in employee benefits or other workforce-related costs.
Source: Economic Times