By Timothy S. Donahue
Top Takeaways:
- ITC’s Q3 FY26 profit fell nearly 10% as higher input costs and a one-time charge related to India’s new labor codes weighed on results.
- Revenue grew about 6% year over year, supported by solid cigarette sales and broader consumer goods performance.
- The company also announced an interim dividend of ₹6.50 per share, reflecting confidence in long-term earnings.
India’s largest cigarette producer, ITC Ltd., reported a decline in third-quarter net profit on Thursday, as rising costs and a one-off charge tied to the country’s new labor regulations offset revenue growth.
For the quarter ended Dec. 31, 2025, ITC’s standalone net profit fell to ₹50.89 billion ($555 million), down from ₹56.38 billion in the same period a year earlier — a nearly 10% year-over-year decline. The results included a one-time charge of ₹2.74 billion related to the implementation of India’s recently overhauled labor codes, which have deepened compliance costs for major companies across sectors.
Despite the profit contraction, ITC’s revenue rose to ₹193.59 billion, up about 6% year over year, driven by broad-based growth across its cigarette business — India’s largest cigarette manufacturer — and its diversified consumer goods portfolio, which spans packaged foods, personal care, and other fast-moving consumer products.
A company spokesperson said profit before exceptional items “more accurately reflects the company’s operating performance,” with **underlying results showing continued resilience despite cost pressures,” according to reporting on the quarter’s financials.
ITC also declared an interim dividend of ₹6.50 per share.
Industry observers have pointed to higher leaf tobacco costs and broader input inflation as key factors squeezing margins, particularly in the cigarette segment, which has historically been a major profit contributor to the group.
