ITC's Q3FY26 results: Net profit flat at ₹4,931.19 cr on labour Code impact

Firm says GST rate rejig, duty changes have led to an unprecedented increase in tax incidence on cigarettes

Cigarette-to-soap conglomerate ITC on Thursday reported a consolidated net profit (attributable to owners) of ₹4,931.19 crore for the third quarter (October-December/Q3) of 2025-26 (FY26), affected by a one-time provision related to the new labour codes and a base effect from an exceptional item in Q3 of 2024-25. In the year-ago period, net profit had stood at ₹4,934.8 crore. 

The Bloomberg consensus estimate for net profit was ₹5,232 crore. 

A company spokesperson said that profit before exceptional items in continuing operations more accurately reflects the company’s operating performance. Consolidated profit before exceptional items and tax stood at ₹7,108.66 crore in Q3FY26, up 8.8 per cent from the year-ago period. 

 

The company reported consolidated gross revenue of ₹21,706.64 crore for Q3FY26, up 6.7 per cent from ₹20,349.96 crore a year ago. 

Net revenue of ₹20,047 crore exceeded the Bloomberg consensus estimate of ₹19,030 crore. Sequentially, net revenue rose 2.8 per cent, while net profit fell 3.8 per cent. 

The board has recommended an interim dividend of ₹6.5 per share for the financial year ending March 31, 2026. 

ITC said it delivered a “strong” performance during the quarter and highlighted the results of group entities — ITC Infotech, Surya Nepal, and ITC Hotels. 

Revenue from all operating businesses increased. The cigarette segment reported revenue of ₹9,681.08 crore in Q3FY26, up 8.2 per cent year-on-year (Y-o-Y). Pre-tax profit for the segment stood at ₹5,487.29 crore, up 5.7 per cent Y-o-Y. 

The company said recent changes to goods and services tax and excise duty rates, effective February 1, have led to an unprecedented increase in tax incidence on cigarettes. 

Such a steep increase will further encourage illicit trade and cause immense hardship and losses for millions of farmers, micro, small and medium enterprises, retailers, local value chains nurtured by the industry, and the exchequer, ITC said. 

The non-cigarette fast-moving consumer goods segment recorded revenue of ₹6,109.58 crore in Q3FY26, up 12.6 per cent Y-o-Y, driven by broad-based growth across categories. 

The company highlighted strong performance in its premium portfolio, NewGen channels, and digital-first and organic offerings. Pre-tax profit for the segment was ₹448.29 crore, up 39.8 per cent. 

Revenue from the agribusiness segment rose 6.4 per cent to ₹3,859.04 crore in Q3FY26, led by value-added agri products and leaf tobacco. Pre-tax profit stood at ₹495.85 crore, nearly unchanged from ₹496.15 crore in the year-ago period. Revenue from the paperboard, paper, and packaging segment was ₹2,203.03 crore, up 2.7 per cent, while pre-tax profit fell 4.2 per cent to ₹188.77 crore, affected by a planned shutdown for maintenance of high-pressure recovery boilers and paper machines.

 

The company said the overall industry continues to face challenges from low-priced supplies, high wood prices, and subdued realisations.