ITC Q3 Results 2026 Highlights: Profit declines 3% QoQ to ₹5,018 crore; dividend of ₹6.5 declared

ITC Q3 FY26 profit remained unchanged at ₹5018.45 crore compared to ₹5013.18 crore in the same period last year.

Revenue from operations grew 6.6% YoY to ₹21,706.64 crore during the quarter under review.

The board also announced an interim dividend of ₹6.5 apiece. The company said the dividend will be paid to its members between February 26 and 28.

The record date for determining eligible shareholders for the dividend is fixed at February 4 .

Before the results announcement, the ITC share price traded near its 52-week low of ₹318. During the trade today, ITC fell to ₹318.05 while its high is ₹322.95. It ended Thursday's session at ₹318.65, down 0.81%.

Bingo Snacks continued to expand its growth momentum by adding three new exciting variants of Baked Puffs to its XXX range: ‘Chilli Cheese,’ ‘Hot & Spicy Korean Style,’ and ‘Hot & Sweet.’

The FMCG businesses delivered a strong performance - double-digit revenue growth, up 11% YoY, according to the filing.

ITC reported a ₹355 crore services cost, primarily due to an increase in the liability for gratuity and compensated absence arising from changes in the definition of wages following the notification of the new Labour Codes.

The ITC board has fixed Wednesday, 4th February, 2026, as the record date for the purpose of determining the entitlement of the members for such interim dividend.

ITC board also approved a dividend of ₹6.50 per share at its board meet. “Declared Interim Dividend of f 6.50 per Ordinary Share of f 1/- each for the financial year ending on 31st March, 2026; such Dividend will be paid between Thursday, 26th February, 2026 and Saturday, 28th February, 2026 to those Members of the Company entitled thereto,” the company said in an exchange filing.

The education and stationery products business continued to emphasise portfolio premiumisation and innovation. Inspired by the popular puzzles on the final page of Classmate notebooks, the brand launched ‘Design Discoveries’—an interactive concept in which visual clues on the cover guide users to puzzles inside the notebook.

In the Dairy category, ‘Aashirvaad Svasti’ fresh dairy portfolio, which includes pouch milk, curd, lassi, and paneer, showed strong growth, which the company believes is driven by top-quality standards, distinctive products, and excellent taste profiles. These products are currently available in the markets of Bihar, West Bengal, and Jharkhand.

According to the ITC exchange filing, “the Cigarettes Business will continue to invest in its powerful trademarks and well-laddered product portfolio, innovation capacity, manufacturing excellence, integrated seed-to-smoke value chain, and world-class last mile execution capability to reinforce its market standing.”

ITC's agri-business reported a 6.3% YoY increase in segment revenue in Q3, driven by strong growth in value-added agricultural products, particularly aqua and coffee, alongside improved leaf tobacco exports. Revenue from the Paperboards, Paper & Packaging segment declined by 3% YoY to ₹2,203 crore.

ITC's largest segment, the cigarettes business, maintained volume-led growth, with net segment revenue growth of 8.2% YoY to ₹9,681 crore, driven by premiumisation and innovation, although the higher costs of leaf tobacco remained a burden.

Segment-wise, FMCG reported double-digit revenue growth of around 11% YoY, along with a 145-basis-point expansion in EBITDA margins. Growth was posted across staples, biscuits, noodles, dairy and personal care, while the premium and digital-first portfolio continued to scale rapidly.

The personal care business experienced strong growth, driven by the ‘Fiama’ range of Personal Wash products, the ‘Savlon’ range within the Health & Hygiene portfolio, and the ‘Nimyle’ range of Homecare products. In the Fragrances category, the business expanded its product portfolio with the launch of ‘Engage Roll On’, a line of 0% alcohol deodorants.

According to ITC, Sunfeast’s biscuits and cakes experienced strong growth during the quarter, driven by compelling brand propositions, distinctive offerings, and strong consumer engagement. The ‘Sunfeast Mom’s Magic’ range of biscuits was expanded with the introduction of two new bakery variants including ‘Choco Walnut’ and ‘Fruit & Nut’. The recently launched ‘Sunfeast Mom’s Magic Shines’ continued to receive strong consumer response and was expanded into new markets.

Growth momentum continues in the Digital-first & Organic portfolio, comprising the Yogabar, Mother Sparsh, Prasuma, and 24 Mantra brands, up 60% YoY, ITC said.

The FMCG businesses delivered a strong performance - double-digit revenue growth, up 11% YoY, according to the filing.

Unprecedented increase in cigarette taxes w.e.f. 1st Feb 2026 — ITC lays down its impact on the cigarette industry

▪ 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 appx. Rs.23,000 cr. p.a. to the Exchequer and accounting for about 1/3rd of the legal industry. It is pertinent to note that illicit trade tends to get embedded in the ecosystem, posing serious challenges to public health and law enforcement; this is borne out by past experience in India and in other regions with high tax incidence.

▪ Stability in taxes on cigarettes along with deterrent actions by enforcement agencies in recent years checked the growth of illicit industry and enabled volume recovery for the legal cigarette industry, leading to higher demand for Indian tobaccos and bolstering revenue to the exchequer from the tobacco sector.

▪ 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.

▪ The legal cigarette industry continues to engage with policymakers for a framework of pragmatic, equitable, non-discriminatory, evidence-based regulations and taxation policies that balance the economic imperatives of the country and tobacco control objectives, cognising for the unique tobacco consumption pattern in India.

Continued improvement in operating performance of the Paper Segment, with underlying profits up 19% QoQ and 11% YoY.

– Performance includes the impact of a planned shutdown for maintenance of the High Pressure Recovery Boiler and paper machines; reported profits up 3.6% QoQ, with margins up 40 bps

– The overall industry remains impacted by low-priced imports, high wood prices, and subdued realisations

▪ Minimum Import Price (MIP) has been imposed on Virgin Multi-layer Paperboard, effective 22 August 2025; green shoots of improvement in net realisations were seen during the quarter

▪ Proactive interventions by the business over the past few years have led to improved wood availability; however, during the quarter, higher wood availability was partly offset by severe cyclones during the harvesting season, keeping wood prices elevated. Prices are expected to moderate going forward

– The industry continues to represent to policymakers for extension of MIP and sustained safeguard measures against low-priced imports of paperboards and coated/uncoated paper

– Robust growth in the Packaging and Printing business, driven by both the Flexibles and Cartons portfolios

Agri Business Segment Revenue up 6.3% YoY led by Value Added Agri products & Leaf Tobacco

- Crop development expertise, superior product quality and strong customer relationships drive growth in leaf tobacco exports

- Robust growth in Value Added Agri products (VAAP) driven by aqua and coffee; the strategic focus of the Business continues to be on accelerating growth by rapidly scaling up its VAAP portfolio, straddling multiple value chains comprising Spices, Coffee, Frozen Marine Products and Processed Fruits, amongst others.

Sustained volume-led growth momentum in the Cigarettes business, with net segment revenue up 7.9% YoY.

– Strong performance in differentiated and premium offerings, leveraging mainstream trademarks and innovation

– Continued focus on strategic portfolio and market interventions to reinforce market standing and counter illicit trade

– Leaf tobacco consumption cost remains elevated; moderation in procurement prices witnessed in the current crop cycle

FMCG–Others delivered a robust performance, with double-digit revenue growth (up 11% YoY) along with EBITDA margin expansion (up 145 bps YoY).

– Broad-based growth across categories, viz. Staples, Biscuits, Noodles, Dairy, Premium Personal Wash, Homecare and Agarbattis

– Incipient signs of recovery in Notebooks, amidst continued low-priced paper imports and opportunistic play by local and regional players

– Strong performance continues in the premium portfolio and NewGen channels; the digital-first and organic portfolio sustains its high growth trajectory, up 60% YoY

– Segment PBIT up 42% YoY

ITC board also approved a dividend of ₹6.50 per share at its board meet. “Declared Interim Dividend of f 6.50 per Ordinary Share of f 1/- each for the financial year ending on 31st March, 2026; such Dividend will be paid between Thursday, 26th February, 2026 and Saturday, 28th February, 2026 to those Members of the Company entitled thereto,” the company said in an exchange filing.

ITC board has fixed Wednesday, 4th February, 2026 as the Record Date for the purpose of determining entitlement of the Members for such Interim Dividend.

The consolidated revenue from operations rose 6.66% YoY to ₹21706.64 crore. Meanwhile, on a standalone basis the revenue jumped 5.9% to ₹19359.46 crore.

ITC posted a 3% decline in its consolidated net profit to ₹5018.45 crore in Q3 FY26. The company had posted a net profit of ₹5186.55 crore in the preceding quarter in FY26.

Meanwhile, on a YoY basis, the figure was flat compared with ₹5013.18 crore in the same period a year ago.

Analysts at MOSL model 6% YoY growth in cigarette EBIT, though margins may contract by 30bp due to rising leaf tobacco prices. expansion.

While we expected a sharp tax hike on cigarettes, the magnitude seems higher than anticipated, likely prompting consensus downgrades to ITC’s cigarette volume and EBITDA estimates, as well as multiples. Our premise of a steep hike was based on: (i) revenue shortfall from recent GST rate cuts; and (ii) strong showing of the legal cigarette industry. Pending clarity, we reckon a more than ~20% price hike and a more than 30% tax hike, which is meaningfully sharp.

Overall, we are cutting EBITDA by 7% each for FY27E/FY28E. We downgrade the stock to ‘HOLD’ from ‘BUY’, cutting our tobacco PE valuation to 17x (earlier 23x), yielding an SotP-based target price of INR 415.

Key positive triggers: tobacco costs likely to be lower in FY27; GST benefits in the Foods portfolio.

— Nuvama Research

“Agri revenue is likely to see only a mid-single-digit growth, likely dragged by delayed shipments. We expect EBITDA margin to be stable at ~12%,” Emkay Global.

Other FMCG businesses are likely to see a high single-digit revenue growth, aided by the inorganic business of 24 Mantra. Additionally, given the high share of foods, the company will clock better growth in the foods portfolio, in our view. Segment EBITDA margin is likely to see a sequential recovery of 70bps YoY to 10.7%. On a low base, we see a healthy 35% EBITDA growth in Q3.

ITC shares ended lower on Thursday ahead of Q3 earnings. The stock ended at ₹318.80 on the BSE, down 0.76%

Cigarettes’ EBIT margin is likely to see a sequential slide to nearly 69.8% of net sales, down by 90bps QoQ, as the high-cost inventory enters the base. On YoY basis, we see EBIT margin contraction of 150bps. We believe a low-cost leaf tobacco price benefit will flow from the next quarter.

We expect the cigarettes business to see 5% volume growth, amid a better demand setting. Price growth is likely to be ~1%, aided by the mix. A competitive setting would be key, where market share position is key.

— Emkay Global

Emkay Global sees 4% growth in revenue to ₹17,787.1 crore, while EBITDA growth is likely to be ~7%. It further sees PAT earnings growth at ~6% to ₹5203.6 crore.

Overall gross margin shall contract 94bp YoY to 53.5% while EBITDA margin shall increase 32bp YoY to 34.5%, Nuvama recommended.

Paper business: Nuvama estimates sales growth would be 6% YoY (up 5% YoY in Q2FY26; up 3.1% YoY in Q3FY25), but a 17% YoY dip in profits due to high competition from imports and lack of operating leverage (down 21.2% in Q2FY26; down 30.6% in Q3FY25).

FMCG: We forecast sales shall grow 8% YoY (6.9% YoY in Q2FY26; 4% YoY in Q3FY25), but EBIT to increase sharply 29% YoY (down 0.3% in Q2FY26; down 26.6% in Q3FY25) due to favorable base.

Cigarette volumes shall increase 5.5% YoY on a base of 6% growth in Q3FY25 (6% YoY in Q2FY26). We anticipate cigarette net revenue/EBIT to grow 7.1%/4% YoY (5.7%/4.3% YoY in Q2FY26; 8.1%/4.1% YoY in Q3FY25), said Nuvama Research.

We expect cigarette volume/gross sales growth to be steady and resilient at 6%/6.75% yoy (versus 6%/6.7% in 2QFY26). Cigarette EBIT growth is estimated at ~5% yoy, with EBIT margin declining ~100/60 bps yoy/qoq due to consumption of high-cost leaf tobacco and other inputs. Leaf tobacco prices have moderated in the recent quarters but benefits will be accrued fully from 4Q onwards.

In the FMCG segment, we estimate (1) ~9% yoy revenue growth, as we factor in some unwind of transitory GST-led impact ITC would have seen in ~75% of FMCG portfolio (noodles, biscuits, snacks,) etc., and (2) EBIT margin at ~7.5% (up 165 bps yoy) led by stable RM prices, calibrated pricing interventions, portfolio premiumization and focused cost management.

Agri business growth/EBIT margin is expected at 15%/5.1% yoy.

Paperboards is expected to grow at ~7% yoy amid tough operating conditions (influx of low-priced supplies into global markets, including India, elevated domestic wood prices and subdued realizations) and EBIT margin estimated at ~9.25% (versus 8.6% in 2QFY26).

Netnet, ITC's LFL gross sales/EBITDA growth is expected to be ~8.4%/6.7% yoy.

— Kotak Institutional Equities

Kotak Institutional Equities expects 8.3% YoY rise in sales to ₹18463.3 crore while profit could decline 5.5% YoY to ₹5125.7 crore, it said.

Nuvama forecasts overall revenue shall grow 6% YoY (down 3.7% YoY in Q2FY26 and up 8.3% YoY in Q3FY25). The brokerage has pegged the revenue at ₹18063.6 crore.

Nuvama said it reckons adjusted PAT shall decline ~6% YoY in Q3FY26E due to higher other income in base. It has pegged ITC Q3 PAT at ₹5075.2 crore, down 6.4% YoY.

The company in a BSE filing earlier this month said, that its board will meet on January 29 to "consider and approve the Unaudited Standalone and Consolidated Financial Results of the Company along with the Segment-wise Revenue, Results, Assets and Liabilities for the Quarter and Nine Months ended 31st December, 2025; and consider declaration of Interim Dividend for the financial year ending on 31st March, 2026."