Shares of ITC reported a small rise and was trading in green after the FMCG major is expected to report a steady but mixed performance in the December quarter.Market participants expect a steady yet mixed performance, with improving cigarette volumes and margin expansion offering support, even as concerns persist around pricing pressures and higher taxation. The stock is currently trading at Rs. 320 against the previous close of Rs. 318.65 According to an Economic Times report, brokerage firms forecast modest growth in ITC’s net revenue and operating profit for the quarter. However, a divergence in profit estimates highlights uncertainty surrounding cost pressures and the long-term outlook for cigarette excise duties.
Brokerages tracked by Business Standard estimate ITC’s average net profit at ₹5,175.85 crore for Q3FY26, compared with ₹4,893.4 crore a year ago. This implies a year-on-year (Y-o-Y) rise of around 1.6 per cent. On a quarter-on-quarter (Q-o-Q) basis, profit after tax (PAT) is expected to increase by 6 per cent from ₹5,091.7 crore reported in Q2FY26. Revenue for the quarter is projected to grow 10 per cent Y-o-Y to an average of ₹18,716.48 crore, up from ₹17,052.8 crore in the corresponding period last year. Sequentially, revenue is seen rising 4 per cent from ₹18,021.3 crore in Q2FY26.
The FMCG segment is expected to post a 9 per cent Y-o-Y revenue growth, aided by the partial unwinding of the transitory goods and services tax (GST)-led impact. The segment’s Ebit margin is estimated at 7.5 per cent, an expansion of 165 basis points Y-o-Y, driven by stable raw material prices, calibrated pricing actions, portfolio premiumisation, and focused cost management. Analysts expect the cigarettes business to register volume growth of around 5 per cent amid improving demand conditions, while price growth is likely to remain muted at about 1 per cent, supported largely by product mix. Market share dynamics in a competitive environment will remain a key monitorable.
Cigarettes Ebit margin is expected to decline sequentially to 69.8 per cent of net sales, down 90 basis points Q-o-Q, as higher-cost inventory flows through the base. On a Y-o-Y basis, margins are seen contracting by 150 basis points. However, lower leaf tobacco prices are expected to provide margin benefits from the next quarter onwards.
The muted performance has left long-term investors concerned. ITC was trading at ₹325.75 on July 17, 2017, indicating that shareholders have seen virtually no returns over the past eight-and-a-half years. The stock recently touched a 52-week low and is considered deeply oversold on charts following the government’s announcement of fresh excise duty hikes on cigarettes earlier this month. The negative sentiment triggered an 11 per cent fall in the stock, wiping out nearly ₹97,000 crore in market capitalisation.
Adding to the pressure, brokerage firm Nuvama downgraded ITC from ‘buy’ to ‘hold’, citing the potential adverse impact of higher excise duties on sales and operating income. Alongside its Q3FY26 results, ITC may also consider announcing an interim dividend for the financial year ending March 31, 2026. The company has a strong dividend track record—declaring dividends three times in 2025 (₹7.85 in May and ₹6.50 in February) and twice in 2024 (₹7.50 in June and ₹6.25 in February)—keeping shareholder expectations alive despite the recent stock underperformance.