ITC Q4 FY26 net profit drops 72.4% on high base; revenue jumps 17%
Synopsis
ITC's 72.4% profit crash is a headline that misleads — the real story is a base-effect distortion from last year's ₹15,179 crore hotels demerger windfall. Strip that out and ITC's operating business is growing: revenue up 17% YoY, sequential profit up 9%, and EBITDA expanding. The numbers demand context, and the market's flat reaction shows investors already knew it.
Key Takeaways
ITC reported a 72.4% YoY drop in consolidated net profit to ₹5,469.74 crore in Q4 FY26 .
The decline is primarily due to a one-time exceptional gain of ₹15,179 crore from the hotels business demerger recorded in Q4 FY25 .
Sequential profit improved by approximately 9% from ₹5,018.45 crore in Q3 FY26 .
Consolidated revenue from operations grew nearly 17% YoY to ₹23,821.48 crore in Q4 FY26 .
Full-year FY26 revenue rose 10.2% to ₹89,913.33 crore ; annual EBITDA grew 5.4% .
ITC shares closed nearly flat at ₹307.65 on the NSE ahead of the results.
ITC Limited on Thursday, 21 May 2026 reported a 72.4 per cent year-on-year decline in consolidated net profit for the fourth quarter of FY26 (Q4 FY26), a fall driven almost entirely by a high base effect rather than any operational weakness. The company posted a consolidated profit of ₹5,469.74 crore for the quarter ended March 2026, against ₹19,807.88 crore in Q4 FY25, according to its stock exchange filing.
Why the Profit Fell
The steep year-on-year decline is largely a statistical distortion. In Q4 FY25, ITC had booked an exceptional one-time gain of ₹15,179 crore following the demerger of its hotels business — a non-recurring item that inflated the prior-year base. Strip that out, and the underlying earnings picture looks considerably different.
On a sequential basis, the company actually improved: consolidated net profit rose approximately 9 per cent quarter-on-quarter from ₹5,018.45 crore reported in Q3 FY26 (the December quarter).
Revenue Growth Remains Healthy
Consolidated revenue from operations for Q4 FY26 stood at ₹23,821.48 crore, registering growth of nearly 17 per cent year-on-year from ₹20,376.36 crore in the year-ago quarter. Revenue also climbed around 10 per cent sequentially from ₹21,706.64 crore in Q3 FY26.
For the full financial year, consolidated revenue from operations rose 10.2 per cent year-on-year to ₹89,913.33 crore in FY26, up from ₹81,612.78 crore in FY25.
Full-Year Profit and EBITDA
For FY26 as a whole, ITC's consolidated profit declined 40 per cent to ₹21,018.15 crore, compared with ₹35,052.48 crore in FY25 — again, a comparison distorted by the one-time hotels demerger gain in the prior year.
Consolidated EBITDA increased 6.9 per cent year-on-year during the March quarter, while full-year EBITDA growth stood at 5.4 per cent for FY26, pointing to steady operational progress even as reported profit figures were weighed down by base effects.
Market Reaction
Shares of ITC closed nearly flat at ₹307.65 on the National Stock Exchange (NSE) ahead of the earnings release, suggesting the market had largely anticipated the headline profit decline. The muted reaction underscores that investors appear focused on the underlying operating trajectory rather than the optically large YoY profit drop.
With revenue momentum intact and sequential profit improvement visible, the focus will now shift to whether ITC can sustain double-digit top-line growth into FY27 and expand EBITDA margins across its core FMCG and agribusiness segments.
Point of View
But it is almost entirely a base-effect story — ITC's Q4 FY25 included a ₹15,179 crore non-recurring hotels demerger gain that no analyst expected to repeat. The more instructive read is the 17% revenue growth and the sequential profit uptick, which suggest the core FMCG and agribusiness engine is performing. The real question for FY27 is whether ITC can convert top-line momentum into margin expansion now that the hotels business is off the books and the comparison base normalises. A flat share price reaction tells you the market had already done this arithmetic.
NationPress
6 Jul 2026
Frequently Asked Questions
Why did ITC's Q4 FY26 net profit fall 72.4%?
ITC's net profit fell 72.4% year-on-year to ₹5,469.74 crore in Q4 FY26 primarily because the year-ago quarter (Q4 FY25) included a one-time exceptional gain of ₹15,179 crore from the demerger of its hotels business. The decline reflects a high base effect, not an operational deterioration.
What was ITC's revenue in Q4 FY26?
ITC's consolidated revenue from operations in Q4 FY26 stood at ₹23,821.48 crore, up nearly 17% year-on-year from ₹20,376.36 crore in Q4 FY25, and up around 10% sequentially from ₹21,706.64 crore in Q3 FY26.
How did ITC perform for the full financial year FY26?
For FY26, ITC's consolidated revenue rose 10.2% year-on-year to ₹89,913.33 crore. Full-year consolidated profit declined 40% to ₹21,018.15 crore, again reflecting the distortion from the prior year's one-time hotels demerger gain. Annual EBITDA grew 5.4%.
What was ITC's EBITDA growth in Q4 FY26?
ITC's consolidated EBITDA grew 6.9% year-on-year in Q4 FY26, indicating steady operational performance despite the sharp headline profit decline driven by base effects.
How did ITC shares react to the Q4 FY26 results?
ITC shares closed nearly flat at ₹307.65 on the National Stock Exchange ahead of the earnings announcement, suggesting the market had largely priced in the expected YoY profit decline caused by the high base from the previous year's demerger gain.
