ITC Q3FY26 results: Profit flat at ₹4,931 crore, dividend declared

The conglomerate warned that a new excise duty on cigarettes will lead to a rise in illicit trade, causing hardship and loss to millions of farmers, MSMEs, retailers, and local value chains

FMCG and tobacco major ITC on Thursday reported a consolidated net profit of ₹4,931 crore in the third quarter of the financial year 2025-26 (Q3FY26), which was almost flat compared to the ₹4,935 crore during the same quarter last year. On a quarter-on-quarter (Q-o-Q) basis, profit declined 3.8 per cent from ₹5,126.11 crore in Q2FY26 due to higher raw material costs and a one-time charge tied to the implementation of new Labour codes.

 

"Estimated one-time impact on recognition of past service cost of ₹354.58 crore during the quarter ended December 31, 2025 with respect to increase in liability of gratuity and compensated absences, primarily arising due to change in definition of wages...," ITC said in a BSE filing.

 

 

The company's revenue from operations, however, increased 7.1 per cent year-on-year (Y-o-Y) to ₹21,577.58 crore, from ₹20,140.15 crore during Q3FY25. Sequentially, revenue increased 2.5 per cent from ₹21,047.45 crore.

 

ITC's earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter stood at ₹6,883 crore, up 8.2 per cent Y-o-Y.

ITC Q3 dividend

ITC’s board also approved an interim dividend of ₹6.50 per share, with the record date set as February 4.

Excise duty to increase illicit trade

ITC also warned that the recently-announced excise duty on cigarettes will lead to a rise in illicit trade. Currently, cigarettes are charged 28 per cent goods and services tax (GST), along with a variable compensation cess depending on size and type. Earlier this month, the Centre said that from February 1, the compensation cess would be removed and replaced with an additional excise duty ranging from ₹2.05 to ₹8.50 per stick, depending on cigarette length.

 

"Punitive taxes on the legal cigarette industry in earlier years have resulted in rapid growth of illicit cigarette trade, making India the fourth largest illicit cigarette market globally according to Euromonitor estimates. It is estimated that the illicit cigarette trade causes a loss of ₹23,000 crore per annum to the exchequer and accounting for about one-third of the legal industry," ITC said.

 

"The changes in GST and Excise Duty rates announced recently have led to an unprecedented increase in tax incidence on cigarettes. Such a steep increase will provide further impetus to illicit trade and cause immense hardship and loss to millions of farmers, MSMEs, retailers, local value chains nurtured by the industry and the exchequer," it added.

 

ITC Q3 segment-wise results (Y-o-Y)

• FMCG cigarettes: Revenue at ₹8,791 crore, up 7.9 per cent
• FMCG others: Revenue at ₹6,020 crore, up 11 per cent
• Agri business: Revenue at ₹3,560 crore, up 6.3 per cent
• Paperboards, Paper & Packaging:  Revenue at ₹2,202 crore, up 2.7 per cent

 

Shares of ITC closed marginally down at ₹318.65 apiece on the BSE on Thursday, ahead of its result announcement.