1. At a Glance – The Calm, Cash-Rich Giant Nobody Is Excited About
ITC is that uncle in the family who quietly owns half the village, pays everyone’s school fees, but still gets ignored at weddings because he doesn’t dance. Market cap of ₹3.99 lakh crore, stock price hovering near ₹319, dividend yield a juicy 4.5%, and ROCE sitting at a fat 36.8% — yet the stock is down ~26% YoY. Why? Because ITC doesn’t promise moonshots. It promises cash. Lots of it.
Q3 FY26 numbers were classic ITC: ₹20,047 Cr revenue, ₹5,018 Cr PAT, operating margins of 34%, and interest coverage so high (419x) that lenders probably send them thank-you cards. Cigarettes remain the money-printing ATM, FMCG keeps grinding market share, agri suddenly woke up like it drank Red Bull, paperboards are sulking thanks to China, and hotels are packing their bags for a demerger party.
Question: would you rather own a boring business that pays you every year, or a “story stock” that keeps asking for patience?
2. Introduction – India’s Most Profitable “Boring” Company
ITC has survived British rule, license raj, cigarette bans, ESG activists, sin-tax hikes, and still ends every year with more cash than half of Dalal Street’s startups combined. Founded in 1910, ITC today is not just cigarettes — it’s FMCG, agri exports, paperboards, packaging, IT services, and until recently, hotels.
Despite being called a “tobacco company,” ITC is actually a cash compounding machine cleverly disguised as a diversified conglomerate. Cigarettes contribute only ~42% of revenue but nearly 78% of PBIT. That’s not diversification — that’s cross-subsidy excellence.
Every time the government hikes cigarette taxes, Twitter declares ITC “finished.” And every time, ITC calmly raises prices, volumes stabilize, margins stay fat, and dividends flow. This is not growth-stock adrenaline. This is balance-sheet yoga.
But here’s the real twist: FMCG non-cigarette business is now 26% of revenue, agri
is 17%, hotels are getting demerged, and capital allocation discipline has improved massively. ITC today is less “sin stock” and more “steady-state cash allocator.”
So the real question isn’t “why ITC is boring.” The question is: why does the market hate boring cash?
3. Business Model – WTF Do They Even Do?
Think of ITC as five companies living in one house, with cigarettes paying everyone’s rent.
Cigarettes
80% market share. Pricing power. Loyal consumers. Tax-stable environment lately. Volumes grow slowly, prices grow reliably, margins are obscene. This is the engine.
FMCG Others
Biscuits, atta, noodles, soaps, shampoos, incense sticks, notebooks — basically everything your mom buys when she says “ITC ka hi le lo.” Margins are lower but improving. Scale and distribution is the real moat here.
Agri-Business
Exports leaf tobacco, spices, coffee, frozen foods, marine products. Handles ~3 million tonnes annually across 22 states. This is volatile but strategic — it feeds FMCG and earns forex.
Paperboards & Packaging
High-quality, sustainable boards, food-grade packaging. Capital intensive, cyclical, currently under pressure from cheap Chinese imports. Not glamorous, but critical for FMCG supply chain control.
Hotels (Demerger Mode)
Luxury to mid-scale hotels, asset-right model, ~130 properties. Will soon live separately as ITC Hotels Ltd, unlocking value and reducing conglomerate discount.
Simple summary: Cigarettes print
1 thought on “ITC Ltd Q3 FY26 — ₹5,018 Cr Quarterly PAT, 34% OPM, 4.5% Dividend Yield & a Sin Business That Prints Cash Like RBI”
may i know the 4.5% dividend yield calculation please?