Shares of ITC Ltd were under pressure in Friday's trade, falling 1.74 per cent to Rs 302.65. At this level, the stock has corrected 25.01 per cent over the past six months.

Brokerages largely maintained cautious to neutral views on the FMCG major following the March 2026 quarter (Q4 FY26) results. Motilal Oswal Financial Services Ltd (MOFSL) said ITC reported consolidated gross cigarette sales growth of 30 per cent year-on-year (YoY) to Rs 11,950 crore against its estimate of Rs 9,040 crore.

However, it highlighted pressure on net cigarette sales and near-term earnings volatility due to excise duty hikes and staggered price increases.

"Net cigarette sales (Rs 5,950 crore) declined 22 per cent, given the increase in excise duty. There was a month gap between the new tax announcement date and the implementation date (February 1), unprecedented in the history of tax increases. It led to a significant gap between primary and secondary sales, thereby Q4 performance is not comparable. Moreover, given such a sharp increase in taxes, ITC has adopted a calibrated price hike strategy (unlike immediate tax pass-on historically) to protect drop-out of consumers from legal to illegal cigarette markets. Cigarette price hikes are still active, and the cumulative hike has not reached the tax-neutral level," MOFSL said.

"In cigarette business, the tax hike pass-on to consumers is still in progress. Thus, cigarette revenue and EBIT performance will be quite volatile in the near term (at least up to 1QFY27). Earnings pressure on cigarettes would take away the near-term catalysts (recovery in FMCG and Paper) and valuation comfort. ITC has a full cigarette portfolio to better navigate the tax increase, but competitive pressure from illicit cigarettes will take a toll on the formal cigarette industry," MOFSL also said.

"A calibrated price hike is expected to impact cigarette EBIT performance in the near term. We maintain our Neutral rating on ITC with our SoTP-based TP of INR335 (implying 20x FY28E EPS)," it further stated.

Axis Direct maintained its 'Hold' rating on the stock, saying ITC weathered tax shocks with resilient FMCG growth.

Meanwhile, Nuvama Institutional Equities also gave a 'Hold' rating while trimming its target price on the stock to Rs 350 from Rs 365 earlier.

Elara Capital reiterated its 'Accumulate' call on ITC with a target price of Rs 335.