FMCG major ITC’s December quarter (Q3FY26) consolidated net profit stood at Rs 4,931 crore, flat compared to Rs 4,935 crore reported in the year ago period. The profit after tax (PAT) is attributable to the owners of the parent. On a quarter-on-quarter (Q-o-Q) basis, profit declined 3.8% from Rs 5,126 crore in Q2FY26 due to higher raw material costs and a one-time charge tied to the implementation of new Labour codes.
The company’s consolidated revenue from operations stood at Rs 21,707 crore in Q3, up nearly 7% versus Rs 20,350 crore posted in the corresponding period of the last financial year. Sequentially, revenue increased 2.8% from Rs 21,256 crore reported in Q2. While ITC’s Q3 profit was below street estimates of Rs 5,232 crore, revenue was higher versus analysts estimates of Rs 19,030 crore for the period.
Labour Code Factor
The company declared an interim dividend of Rs 6.50 for the financial year ending on March 31, 2026. The dividend will be paid between February 26 and 28, the company filing said. ITC has fixed Wednesday, February 4 as the record date for the purpose of determining entitlement of the shareholders.
The consolidated gross revenue was up 7% YoY, driven by double-digit revenue growth in FMCG-others at 13% and sustained momentum in cigarettes business which saw an uptick of 8.2%, the company said.
Consolidated earnings before interest tax depreciation and amortisation (Ebitda) rose 8.2% YoY to Rs 6,883 crore, ahead of street estimates of Rs 6,439 crore for the quarter. Ebitda margins came in 31.7% in Q3 versus 31.3% reported in the year-ago period and 31.5% seen in Q2 on FY26. Sequentially, consolidated Ebitda was up 2.8% YoY versus Rs 6,695 crore reported in Q2.
Segment-wise, the FMCG business saw profit before interest and tax (PBIT) growing 42% YoY led by broad-based growth across categories including staples, biscuits, noodles, dairy, premium personal wash, homecare & agarbattis.
The company also said there were incipient signs of recovery in notebooks amid continued low-priced paper imports and opportunistic play by local and regional players. It also said it saw strong performance in the premium portfolio and NewGen channels; digital-first & organic portfolio sustained its high growth trajectory, up 60% YoY.
In the cigarette business, sustained volume-led growth helped push up segment revenue, which grew 8% YoY. The company said that its performance in differentiated and premium offerings remained strong, leveraging mainstream trademarks & innovation. Leaf tobacco consumption cost remained elevated while moderation in procurement prices were witnessed in current crop cycle.
Regulatory Headwinds
The company has also warned of an unprecedented increase in cigarette taxes with effect from February 1. Punitive taxes on the legal cigarette industry in earlier years have resulted in rapid growth of illicit cigarette trade, making India the 4th largest illicit cigarette market globally according to Euromonitor estimates. It is estimated that illicit cigarette trade causes a loss of nearly Rs 23,000 crore per annum to the exchequer and accounting for about 1/3rd of the legal industry, ITC said.
The agri business segment revenue was up 6.3% year-on-year led by value-added agri products and leaf tobacco. There was continued improvement in operating performance of paper segment with underlying profits up 19% QoQ and 11% YoY.