Both ITC and Hindustan Unilever delivered resilient June-quarter results, though their performance drivers differed significantly. According to reports from The Financial Express, ITC reported consolidated gross revenue of ₹29,410 crore for Q1FY27, up from ₹23,007 crore in the corresponding quarter of FY26. The company's first quarter revenue from operations increased to ₹29,523 crore from ₹23,129 crore, while total income rose to ₹30,179 crore from ₹23,812 crore. HUL posted consolidated turnover of ₹17,184 crore for the quarter ended 30 June 2026, increasing 10% from ₹15,660 crore in the corresponding quarter of FY26. Underlying sales growth stood at 10%, comprising 5% volume growth and 5% pricing growth, marking the company's strongest quarterly growth in 13 quarters.
The cigarette tax increase had a much larger effect on ITC's profitability than on demand, as reported by The Financial Express. Consolidated profit attributable to shareholders increased to ₹5,244.20 crore for the quarter ended 30 June 2026 from ₹4,394.13 crore a year earlier, though the reported figure included the ₹405.88 crore exceptional gain arising from Sproutlife Foods. Operating profitability in cigarettes remained under pressure as the company adopted staggered price increases instead of immediately passing on the entire tax burden. Brokerages differed on recovery timelines, with Jefferies arguing stronger-than-expected cigarette volumes gave ITC greater flexibility to take additional price increases, while Nomura expected profitability to improve progressively through FY27 and projected cigarette earnings per stick to return to pre-tax-hike levels by the fourth quarter of FY27.
Dividend remains one of the biggest differentiators between the two FMCG majors, as reported by The Financial Express. ITC has historically maintained one of the highest dividend payouts in the Indian market, supported by strong cash generation from its cigarette business. Nomura estimates ITC's dividend yield at 4.3% for FY27, rising to 5.1% in FY28 and 5.5% in FY29, while Macquarie expects a 3.9% dividend yield in FY27, increasing to 4.3% in FY28 and 4.6% in FY29. HUL's dividend profile remains comparatively lower, with Macquarie estimating a 2.1% dividend yield in FY27, 2.3% in FY28 and 2.6% in FY29. Jefferies expects HUL to deliver about 9% annual revenue growth between FY26 and FY29, accompanied by gradual EBITDA margin improvement.
Brokerages remained positive on both companies following their Q1 FY27 results, though their investment cases differ significantly, according to The Financial Express. Jefferies upgraded ITC to 'Buy' from 'Hold' with a target price of ₹350, implying an upside of about 23%. Nomura also upgraded ITC to 'Buy' from 'Reduce' and raised its target price to ₹340 from ₹300, implying an upside of about 21%. Macquarie maintained a 'Neutral' rating and cut its target price to ₹300 from ₹330, implying an upside of around 11%. For HUL, Jefferies retained its 'Buy' rating with a target price of ₹2,850, indicating an upside of about 31%, while Macquarie reiterated its 'Outperform' rating with a target price of ₹2,860, implying an upside of about 43%.
