Brands
ITC’s Q3 smoke signals mixed as profit flattens, costs rise
MUMBAI: When the smoke cleared, the numbers told a steadier story than expected. FMCG and tobacco major ITC reported a largely flat performance in the December quarter of FY26, with consolidated net profit inching in at Rs 4,931 crore, almost unchanged from Rs 4,935 crore a year ago.
On a quarter-on-quarter basis, profit slipped 3.8 per cent from Rs 5,126 crore in Q2 FY26, weighed down by higher raw material costs and a one-time hit linked to the implementation of new Labour Codes. The company said it recognised a past service cost of Rs 354.58 crore during the quarter, reflecting higher gratuity and compensated absence liabilities following changes in wage definitions.
Revenue, however, offered some cheer. ITC’s revenue from operations rose 7.1 per cent year on year to Rs 21,577.58 crore, compared with Rs 20,140.15 crore in the same quarter last year. Sequentially, revenue grew 2.5 per cent from Rs 21,047.45 crore, supported by steady demand across key businesses.
Earnings before interest, tax, depreciation and amortisation stood at Rs 6,883 crore, up 8.2 per cent year on year, pointing to resilient operating performance despite cost pressures.
Cigarettes remained a key growth engine, with FMCG cigarette revenue rising 7.9 per cent year on year to Rs 8,791 crore. FMCG others clocked an 11 per cent increase to Rs 6,020 crore, while the agri business grew 6.3 per cent to Rs 3,560 crore. The paperboards, paper and packaging segment posted a modest 2.7 per cent rise in revenue to Rs 2,202 crore.
Even as the numbers held firm, ITC flagged fresh concerns on taxation. The company warned that recently announced changes to cigarette duties could accelerate illicit trade. From February 1, the Centre will replace the compensation cess with an additional excise duty ranging from Rs 2.05 to Rs 8.50 per stick, depending on cigarette length, on top of the existing 28 per cent GST.
ITC cautioned that steep tax hikes in the past have already made India the world’s fourth-largest illicit cigarette market, accounting for nearly one-third of the legal industry and causing an estimated annual revenue loss of Rs 23,000 crore to the exchequer.
“The unprecedented increase in tax incidence will further fuel illicit trade and impact farmers, MSMEs, retailers and local value chains,” the company said in its filing.
Meanwhile, the board approved an interim dividend of Rs 6.50 per share, with February 4 set as the record date offering shareholders a small puff of relief in an otherwise measured quarter.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
