New Delhi, Aug. 3 -- The tide appears to be turning for ITC Ltd. After months of pressure, investors looked past a bruising June-quarter performance in its cigarette business, sending the stock higher on Monday.

The cigarette segment's earnings before interest and tax (Ebit) fell 35% year-on-year to Rs.3,341 crore in the June quarter (Q1FY27), reflecting the first full-quarter impact of the sharp tax increase that took effect on 1 February. But investors had largely braced for the hit. For comparison, cigarette Ebit at Godfrey Philips India and VST Industries declined 52% and 41%, respectively.

The cigarette business now contributes 76% of ITC's total segment Ebit, down from nearly 84% in FY26. "The profitability was worst hit in Q1 and...