ITC's paperboards and packaging profit plunges 21%

ITC Paperboards, Paper and Packaging segment reported a challenging second quarter for fiscal year 2026 (Q2 FY26), with segment results (PBIT) declining by 21.2% year-over-year to INR 191-crore. Despite the profit contraction, segment revenue saw a modest rise of 5.0% year-over-year to INR 2,220-crore, primarily driven by volume growth.

The company explicitly noted that the overall industry "remains impacted by low-priced supplies, subdued realisations, and elevated wood prices." The adverse conditions stemmed from the continued influx of low-priced supplies in both global and Indian markets.

However, the segment did demonstrate a sequential recovery, with performance improving significantly over the preceding quarter (Q1 FY26). The segment results (PBIT) were up 17% quarter-on-quarter, and margins saw a sequential improvement of 90 basis points (bps). The company also reported initial signs of moderation in wood prices, accompanied by improving availability, which could offer some margin relief in the future.

In response to the persistent threat from cheap imports, ITC highlighted several ongoing regulatory actions. The minimum import price (MIP) was introduced on virgin multi-layer paperboard effective August 2025. Furthermore, an anti-dumping duty (ADD) has been recommended on imports from China and Chile, while an investigation into supplies from Indonesia is currently in progress. The industry is also actively engaging with policymakers to secure safeguard measures for low-priced imports of coated and uncoated paper.

On the operational front, the packaging and printing business witnessed a sequential uptick in domestic demand. ITC continues its strategic interventions focused on enhancing plantations, developing new afforestation areas, and implementing satellite-based plantation monitoring systems to secure its raw material supply and manage costs. The decor segment also continued to deliver strong growth.