ITC Hits FY26 Continuing Revenue of ₹89,913 Cr; Proposes ₹14.50 Total Dividend Amid Excise Duty Shift

Synopsis:- ITC Limited reported consolidated revenue of Rs.89,913 crore for FY26, up 10.2 percent year-on-year, and PAT from continuing operations of Rs.21,018 crore  up 4.9 percent on a like-for-like basis while recommending a final dividend of Rs.8 per share, taking the total FY26 payout to Rs.14.50 per share; but a sharp spike in excise duty on cigarettes from February 2026 inflates the revenue comparison materially and complicates straight line-over-line reading of the results.

Shares of India’s largest cigarette manufacturer and diversified conglomerate came into focus after its Board of Directors, meeting on May 21, 2026, approved audited standalone and consolidated results for Q4 and FY26. The results, spanning cigarettes, branded packaged foods, agri-business, paperboards, and IT services, carry a significant accounting nuance that must be read before drawing conclusions from headline numbers.

With a market capitalisation of Rs. 3,88,601 crore, the shares of ITC Limited were last recorded at Rs. 310 per share as of May 18, 2026  near the lower end of the 52-week range of Rs. 287–444. At this price and FY26 consolidated EPS (continuing operations) of Rs.16.52, the stock trades at approximately 18.8x  a valuation that reflects both the earnings stability of the cigarette franchise and the market’s persistent discount for regulatory risk around tobacco.

The Excise Duty Distortion  

The single most important context for interpreting ITC’s FY26 numbers is a policy change that took effect February 1, 2026: following the expiry of the GST Compensation Cess, the Government of India increased both GST and Central Excise duty on cigarettes. Under Ind AS 115, GST is excluded from revenue but excise duty is not  meaning cigarette revenues and total consolidated revenues for Q4 and FY26 are not comparable with prior periods.

The impact is stark. Excise duty in Q4 FY26 standalone jumped to Rs. 5,644 crore from Rs.1,246 crore in Q4 FY25  an increase of Rs. 4,398 crore in a single quarter. For the full year FY26, excise duty was Rs. 9,656 crore against Rs. 4,913 crore in FY25. The roughly Rs. 4,743 crore step-up in annual excise duty flows through gross revenue but is simultaneously offset in the cost of goods.

The segment profit line which strips this out  is the cleaner measure of operational performance. Readers comparing ITC’s revenue growth of 10.2 percent this year against prior years should treat Q4 FY26 and full-year FY26 figures as not strictly comparable with previous periods, as the company itself flags.

FY26 Financial Results 

On a consolidated basis, revenue from operations grew 10.2 percent to Rs.89,913 crore. Adjusting for the excise duty effect, the underlying business performed in mid-single-digit growth territory. PAT from continuing operations grew 4.9 percent to Rs.21,018 crore from Rs.20,036 crore in FY25.

The year-ago comparison of Rs. 34,746 crore total consolidated PAT (FY25) includes Rs. 14,652 crore from discontinued operations of the Hotels business that was demerged as ITC Hotels Limited  and is not a meaningful comparison point. On a continuing-operations basis, earnings grew at a modest but consistent pace. Consolidated EPS from continuing operations was Rs.16.52, up from Rs.15.78 in FY25.

Q4 FY26 consolidated revenue grew 17 percent year-on-year to Rs. 23,821 crore  again, materially inflated by the excise reclassification. Q4 PAT from continuing operations grew 6.1 percent to Rs. 5,470 crore, with EPS of Rs.4.30 against Rs.4.05 in Q4 FY25.

Segment Analysis

The Cigarettes segment remains ITC’s financial backbone. Standalone cigarette revenue grew 13.7 percent to Rs.37,100 crore in FY26  largely excise-inflated  but the segment profit number is more instructive: Rs.21,051 crore in FY26 against Rs.20,025 crore in FY25, a 5.1 percent increase that reflects genuine pricing and volume performance net of the duty pass-through. The cigarettes business contributes approximately 78 percent of ITC’s consolidated segment profit before interest and tax.

The more interesting story is FMCG Others. The segment  which houses Aashirvaad, Sunfeast, Yippee, Fiama, Engage, and the recently amalgamated Sresta (organic foods) and Wimco (safety matches and agarbattis) businesses  posted EBITDA of Rs.2,412 crore in FY26, up 11.5 percent from Rs.2,164 crore in FY25. Q4 FY26 EBITDA for FMCG Others came in at Rs.671 crore, a 36.9 percent jump over Q4 FY25’s Rs.490 crore the strongest quarterly margin performance the division has seen in recent years.

Segment profit for FMCG Others (after brand-building costs) grew 14.1 percent for the year. This is the pivot the market has been waiting on: the non-cigarette FMCG business reaching a scale where profitability compounds meaningfully alongside revenue.

The Agri Business segment grew revenue modestly by 2.7 percent to Rs.20,296 crore, with segment profit of Rs. 1,496 crore (FY25: Rs.1,478 crore)  essentially flat, reflecting commodity price volatility in wheat, rice, spices, and leaf tobacco. Paperboards, Paper & Packaging saw segment profit decline 12.6 percent to Rs.797 crore from Rs.911 crore, as input cost pressures and subdued demand in paper markets weighed on margins. The division’s capital intensity remains a drag on returns relative to the cigarette and FMCG franchises.

Exceptional Items

FY26 exceptional items for continuing operations at Rs.183.87 crore (standalone) represent a net of a Rs.271.95 crore one-time charge from the New Labour Codes implementation  which has impacted several Indian companies this year  and a Rs.88.08 crore receipt from final settlement of an insurance claim on leaf tobacco stocks destroyed in a warehouse fire in a prior year.

Dividend and Capital Return

The Board recommended a final dividend of Rs.8 per share (face value Rs.1), with a record date of May 27, 2026. Combined with the interim dividend of Rs.6.50 per share paid in February 2026, total FY26 dividend stands at Rs.14.50 per share  up from Rs.14.35 in FY25. Total dividend outflow for the year will be Rs.18,168 crore. At the current price of Rs.310, this implies a trailing dividend yield of approximately 4.68 percent, one of the higher yields in the large-cap FMCG space and a meaningful reason for dividend-oriented investors to look at the stock near its lower range.

Business Overview

Established in 1910 and headquartered in Kolkata, ITC Limited is India’s largest cigarette manufacturer with approximately 80 percent market share in the organised domestic cigarette market. The company operates across four business segments: FMCG (Cigarettes and Others), Agri Business, Paperboards Paper & Packaging, and Others (IT services and hotels). The Hotels business was demerged as a separate listed entity (ITC Hotels Limited) in FY25.

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