ITC Q4 Preview: Can cigarette, FMCG business cushion weak topline? Dividend eyed

ITC Q4 Preview: FMCG major ITC is set to announce its final dividend for FY26 along with its March quarter earnings later this week. The company’s board is scheduled to meet on Thursday, May 21, to approve the Q4 and full-year FY26 financial results and consider the final dividend payout for shareholders.

The final dividend recommendation will be subject to shareholder approval. Earlier this fiscal, the company had announced an interim dividend of Rs 6.50 per share after its December quarter results.

ITC Q4 preview: Margins seen improving despite weak revenue

According to Zee Business research estimates, ITC is expected to post a muted revenue performance for the March quarter, while profitability may improve due to better margins.

Revenue for Q4FY26 is estimated at Rs 18,130 crore, down 1.2 per cent from Rs 18,348 crore in the year-ago period.

EBITDA is likely to rise 2.4 per cent year-on-year to Rs 6,130 crore, compared with Rs 5,986 crore last year. EBITDA margins are expected to improve to 33.8 per cent from 32.6 per cent earlier.

Profit after tax (PAT) from continuing operations is estimated at Rs 4,950 crore, up 1.5 per cent from Rs 4,875 crore in the corresponding quarter last year.

Cigarette business may remain under pressure

Analysts expect ITC to report largely steady quarterly numbers, with margin expansion likely across key businesses. However, higher taxes are expected to keep cigarette volumes largely flat during the quarter.

Partial pass-through of tax hikes is also likely to weigh on EBIT growth in the cigarette segment.

At the same time, the FMCG business is expected to post strong growth in both revenue and EBIT. Analysts also see a positive impact from GST rate cuts across nearly 75 per cent of the company’s portfolio.

Agri business may see weakness

ITC’s agri business could remain under pressure due to lower exports amid the ongoing conflict in the Middle East, which has affected trade flows and demand in some overseas markets.

Q3FY26 highlights

In the December quarter, ITC reported a standalone net profit of Rs 5,088.83 crore, down 6.1 per cent year-on-year from Rs 5,421.36 crore in the corresponding quarter last year. The decline in profitability was largely due to a one-time labour code-related cost of Rs 273.83 crore.

Revenue from operations rose 5.8 per cent YoY to Rs 19,359.46 crore in Q3FY26, compared with Rs 18,290.24 crore a year ago.

EBITDA for the quarter stood at Rs 6,271 crore, up 7.6 per cent from Rs 5,828 crore in the same period last year.

Alongside the quarterly earnings, ITC had announced an interim dividend of Rs 6.5 per share. The company had fixed February 4, 2026, as the record date for the dividend payout. The dividend is scheduled to be paid between February 26 and February 28, 2026, to eligible shareholders.

ITC’s cigarettes business reported revenue of Rs 8,790.76 crore in Q3FY26, marking an 8 per cent rise from Rs 8,136.29 crore in the year-ago quarter.

The non-cigarette FMCG business posted an 11.1 per cent YoY increase in revenue to Rs 6,019.69 crore, compared with Rs 5,418.18 crore in the corresponding period last year. The company said growth was driven by categories such as staples, biscuits, noodles, dairy products, premium personal wash, homecare products and agarbattis.

The agri business segment reported revenue of Rs 3,560.27 crore, up 6.2 per cent from Rs 3,350.81 crore a year ago.

Meanwhile, the paperboards, paper and packaging business recorded revenue of Rs 2,202.41 crore, reflecting a 2.7 per cent YoY increase.