Cigarettes-to-stationery maker ITC’s net profit for the fourth quarter of FY26 exceeded analysts’ estimates after rising nearly 5% year-on-year, the firm disclosed on Thursday.
The FMCG major posted a standalone bottom-line of Rs 5,113 crore from its continuing operations, compared to Rs 4,875 crore in the year-ago period. Profit from continuing operations means profitability derived from a company’s regular, ongoing business operations.
Last year’s net profit reflected a one-time gain of Rs 15,179 crore from the hotel business demerger. If included, net profit in Q4 this year shows a decline of 74% versus last year.
Analysts’ in a poll by Bloomberg had estimated the company to post a profit of Rs 4,906 crore in Q4.
Revenue from operations declined 7% to Rs 16,050 crore from Rs 17,249 crore reported a year ago, missing analysts’ estimates of Rs 18,031 crore for the period. However, gross revenue (that is, revenue plus other operating income) rose 17.3% year-on-year to Rs 21,695 crore in Q4, its results showed.
Earnings before interest, tax, depreciation and amortisation (Ebitda) rose 7.3% to Rs 6,426 crore from Rs 5,987 crore reported a year ago. Margin contracted 280 basis points to 29.6% in Q4 from 32.4% reported in the corresponding quarter of the last fiscal. Analysts had estimated margins of 34.3%.
ITC in a statement said its performance in Q4 reflected strong growth despite supply chain disruptions and logistical challenges arising from the ongoing West Asia conflict, with gross revenue rising 17.5% year-on-year. The company noted that its FMCG segment delivered robust revenue growth of 15% versus last year.
Price Adjustments
The company reported cigarette revenue of Rs 11,066 crore during the quarter under review, compared to Rs 8,400 crore in the January-March quarter of the previous year.
“The extremely stringent regulations along with the discriminatory and steep taxation on cigarettes have had numerous negative, albeit unintended repercussions. These include rapid growth in illicit cigarette volumes, resulting in sub-optimisation of the revenue potential of the tobacco sector and significant loss to the exchequer,” the company said.
It added that it took staggered price hikes to mitigate the impact of tax increases in Q4.
FMCG Acquisitions Surge
ITC’s FMCG business reported a 15% y-o-y increase in segment revenue during the March quarter to Rs 6,304 crore from Rs 5,495 in the year-ago period. However, the agri-business segment faced headwinds, as revenue declined by 16% y-o-y in Q4 to stand at Rs 3,075 crore.
“The ongoing West Asia conflict has heightened concerns around India’s energy security and imported inflation. A prolonged disruption, coupled with emerging El Niño conditions, that could weaken monsoons and intensify heatwaves, pose risks to growth, inflation and the current account. These factors may also have second‑order impacts on consumer sentiment and demand conditions and remain key monitorables in the near term,” ITC said.
New age acquisitions, like 24 Mantra Organic Foods, Yoga Bar, Mother Sparsh, and Prasuma & Meatigo, delivered robust growth of 60 % during the year and together are clocking an annual recurring revenue of over Rs 1,350 crore, it said.
The company has also declared a final dividend of Rs 8 per share. To determine the eligibility of shareholders, ITC has set May 27 as the record date, according to the firm’s exchange filing. The dividend amount will be disbursed to the respective stakeholders between July 24 to July 29.