Diversified Indian conglomerate ITC announced a robust 6.1% increase in its adjusted net profit for Q4FY26, driven by strong performances in its core cigarette and fast-moving consumer goods businesses amidst a challenging macroeconomic landscape.
Key Points
- ITC's adjusted net profit from continuing operations grew 6.1% year-on-year to Rs 5,469.74 crore in Q4FY26, primarily driven by its cigarettes and non-cigarette FMCG segments.
- The reported net profit saw a significant 72.7% year-on-year fall due to an exceptional gain of Rs 15,145.18 crore in Q4FY25 from the hotel business demerger accounting entry.
- Cigarette segment revenue increased by 29.5% to Rs 11,951.72 crore, despite an unprecedented increase in tax incidence, with ITC implementing staggered pricing actions and portfolio re-architecture.
- The non-cigarettes FMCG segment posted a 15.4% revenue increase to Rs 6,352.41 crore, with pre-tax profit jumping 51.9% due to broad-based scale-up and nearly 100 new product launches.
- The board recommended a final dividend of Rs 8 per share, bringing the total dividend for FY26 to Rs 14.50 per share, including the interim dividend.
ITC reported a 6.1 per cent year-on-year (Y-o-Y) growth in its consolidated net profit from continuing operations (adjusted net profit) at Rs 5,469.74 crore in the January-March quarter (Q4FY26), primarily led by cigarettes and non-cigarette fast-moving consumer goods (FMCG) businesses.
Net profit in the same period last year stood at Rs 5,155.27 crore.
The cigarette-to-soap conglomerate’s reported net profit fell 72.7 per cent Y-o-Y to Rs 5,387.97 crore in Q4FY26 from Rs 19,727.37 crore in Q4FY25, which included a one-time exceptional gain of Rs 15,145.18 crore arising from an accounting entry related to the demerger of its hotel business, which became effective from January 1, 2025.
Its consolidated gross revenues stood at Rs 23,821.48 crore during the quarter, up 16.9 per cent Y-o-Y.
However, the company said that due to significant changes in the taxation structure for cigarettes from February 1, gross revenue and excise duties for the quarter and the full year are not strictly comparable with those of the previous year.
Revenue net of excise stood at Rs 17,825 crore, down by 5 per cent Y-o-Y, lower than the Bloomberg consensus estimate at Rs 18,928.8 crore.
Net profit came in ahead of the consensus estimate at Rs 4,793.9 crore.
Sequentially, net revenue was down 11.1 per cent, while net profit from continuing operations increased 9 per cent.
Full Year Performance and Macroeconomic Challenges
For FY26, ITC’s gross revenue stood at Rs 89,913.33 crore, up 10.2 per cent.
Net profit from continuing operations rose 4.9 per cent to Rs 21,018.15 crore.
ITC highlighted that company’s "resilient" performance came in amid a challenging macroeconomic and operating environment.
The company also said that the ongoing West Asia conflict had heightened concerns around India’s energy security and imported inflation.
"A prolonged disruption, coupled with emerging El Nino conditions that could weaken monsoons and intensify heatwaves, poses 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," the company said in its commentary.
Segmental Growth Drivers
During Q4FY26, revenue from cigarettes, non-tobacco FMCG, and the paper segments increased.
The heavy-lifting cigarettes segment recorded revenue of Rs 11,951.72 crore in Q4FY26, up 29.5 per cent from the year-ago period. Pre-tax profit at Rs 5,797.30 crore was 7.3 per cent higher Y-o-Y.
The increase in goods and services tax (GST) rate from 28 per cent of transaction value to 40 per cent of retail sale price, along with a steep hike in excise duties with effect from February 2026 upon phasing out of compensation cess, have resulted in an unprecedented increase in tax incidence on cigarettes, the company pointed out.
To mitigate the impact, the company is taking "staggered and agile" pricing actions.
It was also re-architecting the product portfolio by leveraging a diverse range of powerful trademarks, it added.
The non-cigarettes FMCG segment posted revenue of Rs 6,352.41 crore in Q4FY26, up 15.4 per cent Y-o-Y.
Pre-tax profit at Rs 525.78 crore, jumped 51.9 per cent Y-o-Y.
ITC attributed the growth to broad-based scale up across categories.'
Nearly 100 new products, anchored on the vectors of health and nutrition, hygiene, protection and care, convenience and on-the-go and indulgence, were launched across target markets during the year, the company said.
Paperboards and Agri Business Performance
The paperboards, paper and packaging segment reported revenue of Rs 2,228.61 crore in Q4FY26, up 1.8 per cent Y-o-Y.
Pre-tax profit at Rs 232.50 crore was up by 19.3 per cent as the imposition of minimum import price (MIP) on virgin multi-layer paperboard provided partial relief to the industry, coupled with moderation in wood prices in the latter half of the year.
The agri business performance was impacted by geopolitical disruptions.
Revenue from the segment at Rs 3,166.65 crore was down by 14.3 per cent Y-o-Y. Pre-tax profit fell 20.8 per cent to Rs 200.11 crore.
The board recommended a final dividend of Rs 8 per share.
Including the interim dividend of Rs 6.50 per share paid on February 27, the total dividend for the financial year ended March 31, 2026, amounts to Rs 14.50 per share.
