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
One Response
may i know the 4.5% dividend yield calculation please?