ITC Share Price Today: Century Pulp Acquisition and Cigarette Recovery Improve Long-Term Outlook

ITC shares are back in focus after the company completed its largest-ever acquisition while investors continued to assess its latest quarterly earnings. Although the FMCG giant reported a sharp decline in quarterly profit due to higher cigarette taxes, resilient demand in its core tobacco business and continued strength in its non-cigarette segments have improved sentiment toward the stock.

The latest developments suggest ITC is entering a new phase, with management relying on pricing power, diversification and strategic acquisitions to reduce its dependence on cigarettes while maintaining profitability.

ITC completes Century Pulp acquisition

ITC announced that it has completed the acquisition of Century Pulp & Paper from Aditya Birla Real Estate in a ₹3,500 crore deal, the largest acquisition in the company’s history.

The transaction formally adds Century Pulp’s assets, employees, contracts and operations to ITC’s Paperboards and Specialty Papers business. The acquisition increases ITC’s paper and paperboard production capacity by more than 50%, taking total annual capacity to around 1.5 million tonnes.

With the integration complete, ITC becomes India’s largest integrated paperboards and paper manufacturer. The company also expects the acquisition to strengthen its position in premium packaging, sustainable paper products and value-added specialty papers, areas where demand continues to expand across FMCG, e-commerce and industrial sectors.

The deal also provides another important earnings pillar outside cigarettes as ITC continues diversifying its revenue base.

Cigarette business shows signs of stabilising

Investor attention remains firmly on ITC’s cigarette division, which continues to generate the majority of the company’s profits. The government surprised the industry earlier this year by imposing significantly higher excise duties on cigarettes. Rather than passing the entire increase on to consumers immediately, ITC opted for a phased pricing strategy designed to protect market share and discourage smokers from switching to illicit products.

While the strategy weighed on margins during the June quarter, cigarette volumes proved far more resilient than many analysts had expected.

Several brokerages now believe the worst of the tax impact may already be behind the company. They expect further price increases during the coming quarters to gradually restore profitability as consumers adjust to the higher prices.

That optimism helped ITC shares rally following the earnings release despite the company’s 27% decline in quarterly profit.

FMCG and paper businesses continue supporting growth

Outside tobacco, ITC delivered another solid quarter across its diversified businesses. The FMCG division continued recording healthy double-digit revenue growth, driven by packaged foods, dairy products, snacks and personal care. Management also introduced more than 30 new products during the quarter as it continued expanding its consumer portfolio.

Meanwhile, the paperboards and packaging division delivered one of its strongest quarterly performances, benefiting from firmer pricing, lower wood costs and supportive government measures limiting cheaper imports.

The newly acquired Century Pulp assets are expected to further strengthen this business over the coming years by increasing production capacity and expanding ITC’s product offering.

What analysts are saying about ITC

Following the quarterly results, several brokerage firms maintained constructive views on the stock. Analysts noted that cigarette volumes held up much better than initially feared after the tax increase, reducing concerns about a large migration toward illegal products.

Many also believe fiscal 2027 will be a transition year as ITC completes the remaining price increases while gradually rebuilding margins. If the current pricing strategy continues to support demand, profitability in the cigarette segment could improve steadily during the second half of the financial year.

At the same time, stronger contributions from FMCG, paperboards and packaging are helping reduce the company’s long-standing dependence on tobacco earnings.

ITC share price outlook

ITC enters the second half of the year with two major positives: improving confidence in its cigarette recovery and the successful completion of its transformational Century Pulp acquisition.

Although higher tobacco taxes will continue weighing on near-term earnings, resilient cigarette volumes suggest pricing actions are working as intended. Combined with continued expansion across FMCG and a significantly larger paper business, investors now have several growth drivers to watch beyond the company’s traditional tobacco operations.

If management successfully restores cigarette margins while integrating Century Pulp as planned, ITC could emerge from this transition period with a more diversified and resilient earnings profile.