ITC
ITC posts 9.9% rise in Q3 profit, announces ₹6.50 interim dividend; flags tax hike risks to cigarette volumes
ITC Ltd on Wednesday reported a 9.9% year-on-year rise in consolidated profit after tax for the quarter ended December 31, 2025, driven by strong growth in its FMCG and cigarette businesses, while warning that a sharp increase in cigarette taxes could fuel illicit trade and hurt farmers, retailers and government revenues.
The company’s board recommended an interim dividend of ₹6.50 per share for the financial year ending March 31, 2026.
Consolidated gross revenue rose 7.1% from a year earlier to ₹19,200 crore, supported by double-digit growth in the FMCG-Others segment and steady momentum in cigarettes. Profit before tax (before exceptional items) increased 8.8% year-on-year to ₹6,959 crore, while earnings per share stood at ₹4.06 after accounting for exceptional items of ₹274 crore.
The FMCG-Others business posted 11% revenue growth, with EBITDA margins expanding 145 basis points, aided by premiumisation, calibrated pricing and cost controls. Growth was broad-based across staples, biscuits, noodles, dairy, personal wash, homecare and agarbattis. New-generation channels such as e-commerce and quick commerce continued to outperform, while the digital-first and organic portfolio grew about 60% year-on-year.
The cigarettes business recorded net segment revenue growth of 7.9%, supported by volume-led growth and strong performance in premium and differentiated offerings.
However, ITC cautioned that recent increases in GST and excise duty have led to an “unprecedented” rise in tax incidence on cigarettes, which it said could accelerate illicit trade. Citing industry estimates, the company said illicit cigarettes already account for about one-third of the market and result in an annual revenue loss of roughly ₹23,000 crore to the exchequer.
In the agri business, segment revenue rose 6.3%, led by value-added agri products and leaf tobacco exports. Paperboards, paper and packaging saw underlying profit growth of 11% year-on-year despite pressure from low-priced imports and high wood costs, while the packaging business posted robust growth.
ITC said its hotels, IT services and international subsidiaries also delivered strong performances during the quarter.
Looking ahead, the company said easing inflation, RBI liquidity support, government spending and recent tax and trade measures could support demand, even as geopolitical tensions and currency pressures persist.
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