July 31, 2026 at 09:04 AM 2 min readmarketsdeveloping
ITC Q1 Profit Pressured by Cigarette Tax Hikes as Bajaj Finserv Gains
ITC Q1 Earnings Forecast:
ITC Limited anticipates a weak performance for the first quarter of fiscal year 2027, driven by cumulative tax hikes on cigarettes of around 45%. Brokerages such as Motilal Oswal Financial Services project consolidated net sales to rise marginally by 2 percent to ₹21,900 crore, while profit after tax is expected to fall by 12 percent to ₹4,620 crore due to declining cigarette volumes.
Segment Performance Breakdown:
While the core cigarette business faces severe margin pressure, ITC's fast-moving consumer goods segment is projected to deliver strong 15 percent revenue growth. Conversely, the agri business remains under pressure with an expected 10 percent revenue decline, even as the company's board convenes to formally approve the quarterly financial results.
Bajaj Finserv Growth:
In parallel earnings reports, Bajaj Finserv posted a 12 percent year-on-year increase in consolidated net profit to ₹3,132 crore alongside a 19 percent rise in operational revenue. The firm also secured board approval to enter the reinsurance business via a new subsidiary pending regulatory clearances.
Pulse Intelligence
Context & ImpactContext & Background
- Cigarette taxation has faced continuous upward revisions across successive fiscal periods in India.
- Diversified conglomerates like ITC have heavily emphasized FMCG expansion to offset core tobacco headwinds.
Key Consequences
- ITC stock may experience short-term volatility as investors digest the impact of tobacco taxation on margins.
- Bajaj Finserv's planned entry into reinsurance will open a new institutional revenue stream upon regulatory approval.
Market & Economic Impact
ITC shares face downside pressure from soft Q1 forecasts, while Bajaj Finserv advances following strong profit growth.
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