Updated: December 1, 2025
ITC Limited’s stock is back in the spotlight as New Delhi weighs a fresh “health security” cess on tobacco, just months after the company wrapped up a transformational year marked by the demerger of its hotels business, new acquisitions in organic foods and paper, and a hefty FY25 dividend payout.
On December 1, 2025, ITC shares were trading around ₹400–₹403 on the NSE, marginally in the red and underperforming a buoyant broader market, after reports of steep new levies on cigarettes triggered a dip across tobacco counters. [1] At the same time, most brokerages still see double‑digit upside from current levels, supported by resilient cigarette volumes, steady FMCG growth and easing input cost pressures. [2]
Below is a detailed look at the latest news, earnings, forecasts and risks around ITC stock as of December 1, 2025.
ITC share price today and recent performance
As of trading on December 1, 2025, ITC is hovering near the ₹400–₹403 mark. Intraday quotes from multiple market trackers show the stock down roughly 0.3–0.8% versus the previous close, with a market capitalisation of just over ₹5 trillion. [3]
Over a longer horizon, the picture looks more subdued:
- Over the past year, ITC’s share price has declined about 9–10%. [4]
- The stock hit an all‑time high of about ₹498–₹500 on September 27, 2024, and a 52‑week low near ₹378 in March 2024. [5]
- Despite the price drift, ITC continues to offer an attractive trailing dividend yield of roughly 3.5% at current levels. [6]
Valuation‑wise, ITC trades at a forward price‑to‑earnings multiple in the mid‑teens, well below many large-cap FMCG peers that still command far higher multiples, according to brokerage commentary. [7]
Why ITC is in focus today: proposed ‘Health Security se National Security’ tobacco cess
The immediate trigger for ITC’s underperformance on December 1 is renewed tax anxiety.
A Moneycontrol report, citing TV channel CNBC Awaaz, said the government is preparing to table two bills in the Lok Sabha: the Central Excise Amendment Bill, 2025 and a new “Health Security se National Security” Cess Bill. [8]
According to that report:
- The proposal includes a cess of roughly ₹2,700–₹11,000 per 1,000 cigarettes,
- Around ₹3,000 per 1,000 sticks is suggested for up to 65 mm filter cigarettes, and ₹4,500 per 1,000 sticks for the 65–70 mm segment,
- A 25% cess on cigars and cheroots is also under consideration, with a capacity‑based cess structure mooted for pan masala. [9]
The idea is to replace the current GST compensation cess on tobacco and create a new framework that gives the Centre more flexibility on excise in the coming years. [10]
On the day of the report, tobacco stocks including ITC fell, with ITC slipping around 0.8% in early trade to near ₹401. [11] The Upstox “Stocks to Watch” list for December 1 explicitly flagged ITC, Godfrey Phillips and VST Industries as names likely to be in focus due to these impending bills. [12]
For investors, the message is clear: tax policy is once again front and centre for the ITC investment case. Even if the final legislation ends up softer than the initial proposal, the market is repricing the regulatory risk premium around the stock.
Earnings snapshot: FY25 and the first half of FY26
FY25: resilient year with a big one‑off gain
For the year ended March 31, 2025 (FY25), ITC reported:
- Gross Revenue from continuing operations: ₹73,464.55 crore
- EBITDA from continuing operations: ₹24,024.83 crore
- Profit before exceptional items and tax: ₹26,000.86 crore
- Earnings per share: ₹16.07 vs ₹15.98 in FY24. [13]
The headline FY25 consolidated profit was inflated by a one‑time gain of about ₹151.8 billion (₹15,179 crore) from the demerger of ITC Hotels, which became a separately listed entity from January 1, 2025. [14]
In the March 2025 quarter (Q4 FY25):
- Standalone operational revenue rose around 9–10% year‑on‑year to roughly ₹18,500 crore. [15]
- Standalone pre‑tax profit increased to ₹64.17 billion (₹6,417 crore), up from ₹62.88 billion. [16]
- Cigarette revenues grew nearly 6%, while the consumer goods (FMCG) segment saw revenue growth of about 3.7%. [17]
A Groww analysis of Q4 FY25 highlighted consolidated revenue from operations of ₹20,376 crore, up 10% YoY, and an adjusted net profit of ₹4,662 crore, down 10% once the exceptional hotel demerger gain is excluded. [18]
The takeaway: core operations grew modestly, especially in cigarettes and agri, but rising input costs and paper/agri volatility weighed on margins.
Q1 FY26: revenue surges, profit flattish
In Q1 FY26 (quarter ended June 30, 2025), ITC reported:
- Net profit: ₹4,912 crore, almost flat versus ₹4,917 crore in Q1 FY25, partly due to the hotels demerger removing a roughly ₹97.5‑crore profit contribution from the base quarter.
- Revenue: up 20% YoY to ₹20,911 crore, from ₹17,457 crore. [19]
Key segment trends: [20]
- Cigarettes: revenue +7.7% YoY; PBIT +3.7%, helped by stable taxation and tighter enforcement against illicit trade.
- Agri business: revenue +39%; PBIT +22%, driven by favourable export/trading opportunities and growth in value‑added agri products.
- FMCG: revenue +8.6%; profitability under pressure from heavy brand‑building and category‑specific headwinds (e.g. notebooks, beverages).
Q2 FY26: muted headline growth, but ex‑Agri story is healthier
For Q2 FY26 (quarter ended September 30, 2025), ITC’s own press release and subsequent coverage paint a nuanced picture: [21]
- Standalone gross revenue: about ₹19,148 crore, with management highlighting 7.1% YoY growth ex‑Agri. [22]
- Times of India and Reuters report net profit of ~₹5,179–5,180 crore, up 4.1% YoY. [23]
- Business Standard notes headline standalone revenue down 3.4% YoY to ₹18,020 crore due to a 31% decline in Agri revenues, but ex‑Agri growth at a healthy 7%. [24]
- EBITDA grew around 2% YoY with margins expanding about 180–185 bps to roughly 34.7–35.1%, driven by mix and cost discipline. [25]
By segment, analysts and company commentary highlight: [26]
- Cigarettes:
- Revenue +6.8% YoY, implying ~6% volume growth in most broker models.
- Premium and differentiated offerings continue to gain share.
- Margins are still feeling the impact of elevated leaf tobacco costs, but procurement prices have begun to moderate.
- FMCG (non‑cigarette):
- Revenue up around 7–8% YoY, led by staples, dairy, snacks and personal care.
- Digital‑first and premium brands such as Yogabar, Mother Sparsh, Prasuma, Meatigo and 24 Mantra now clock a combined annualised revenue run‑rate above ₹1,100 crore, underlining ITC’s push into health‑ and premium‑focused categories. [27]
- Agri business:
- Down 31% YoY in Q2 due to a high base and shipment delays amid U.S. tariff uncertainty; however, H1 FY26 revenue is still up 7% with profits up 10% versus the prior year. [28]
- Paperboards & packaging:
- Revenue growth of ~5% YoY but EBIT down around 21% due to cheap imports and higher wood costs, though sequential trends improved as domestic demand recovered. [29]
Most brokerages describe Q2 as “muted but resilient”, with the ex‑Agri performance broadly in line with expectations.
Structural moves: hotels demerger, organic foods and paperboard expansion
ITC Hotels demerger: unlocking value and reducing capital drag
Effective January 1, 2025, ITC demerged its hotels business into a separate listed entity, ITC Hotels Limited, with January 6, 2025 as the record date. [30]
Key details:
- ITC shareholders received 1 share of ITC Hotels for every 10 shares of ITC held.
- ITC retains a 40% stake in ITC Hotels post demerger. [31]
Hotels were already delivering strong growth before the spin‑off. In Q3 FY25 (Dec‑quarter): [32]
- Hotels revenue: ₹922 crore, +15% YoY
- Profit before tax: ₹302 crore, +43% YoY
Economic Times later reported that ITC Hotels posted FY25 revenue of ₹3,559.8 crore and net profit of ₹637.6 crore, reinforcing the business’s strength as it begins life as a standalone listed company. [33]
For ITC shareholders, the demerger:
- Reduces the capital intensity at the parent level,
- Unlocks the market value of the hotels franchise, and
- Leaves ITC with a strategic minority stake while it refocuses capital towards FMCG, agri and paper.
Acquiring 24 Mantra Organic (Sresta Natural Bioproducts)
In June 2025, ITC completed the acquisition of Sresta Natural Bioproducts Pvt. Ltd., owner of the 24 Mantra Organic brand, for up to ₹472.5 crore in an all‑cash deal. [34]
Regulatory filings show: [35]
- Upfront consideration of ₹400 crore on a cash‑free, debt‑free basis,
- Additional contingent consideration of up to ₹72.5 crore payable over 24 months,
- Acquisition of 100% of SNBPL’s equity, making it a wholly owned subsidiary with step‑down subsidiaries in the U.S. and UAE.
SNBPL brings:
- A network of about 27,500 farmers across 1.4 lakh acres of certified organic land in 10 Indian states,
- A strong presence in organic staples and packaged foods, including exports to the U.S. under its own distribution setup. [36]
This acquisition fits squarely into ITC’s “next‑gen” FMCG strategy, boosting its premium and health‑oriented foods portfolio.
Century Pulp & Paper acquisition: scaling up in paperboards
On March 31, 2025, ITC announced a Business Transfer Agreement to acquire the pulp and paper business of Aditya Birla Real Estate Limited (ABREL), known as Century Pulp & Paper (CPP), at Lalkuan, Uttarakhand. [37]
Key points:
- Total consideration: ₹3,498 crore, payable in cash. [38]
- CPP has an installed capacity of about 4.8 lakh tonnes per annum, making it a significant player in the Indian paper industry. [39]
- As of August 2025, ITC has sought CCI approval for the transaction, with filings emphasising that the deal is not expected to raise competition concerns. [40]
The acquisition is intended to strengthen ITC’s Paperboards & Specialty Papers business, which is already one of India’s largest and most sustainable in the category. [41]
Dividend story: 3.5% yield and a hefty FY25 payout
ITC remains one of the more generous dividend payers in the Indian large‑cap universe.
For FY25:
- Interim dividend: ₹6.50 per share, declared on February 6, 2025 (record date: February 12, 2025). [42]
- Final dividend: ₹7.85 per share, recommended on May 22, 2025 (record date: May 28, 2025), payable between July 28 and July 31, 2025. [43]
That brings the total FY25 dividend to ₹14.35 per share, implying a dividend yield of about 3.5% at a share price near ₹404. [44]
TradingView data also pegs ITC’s 2024 dividend yield at around 3.50%, with a payout ratio near 52%, underlining the company’s stable cash‑return profile. [45]
Analyst forecasts and target prices
Despite the recent price drift and tax overhang, most sell‑side analysts remain constructive on ITC’s medium‑term outlook.
Broker research post‑Q2 FY26
A Business Standard roundup from October 31, 2025 notes that brokerages described the September quarter as muted but highlighted steady core performance and the potential for a “steady recovery” from H2 FY26. [46]
Examples from that coverage: [47]
- Emkay Global: “Add” rating; target price around ₹475, expecting cigarette earnings growth of about 6% in FY26, accelerating to low double digits in FY27 as leaf tobacco costs normalise.
- ICICI Securities: “Add” rating; DCF‑based target price of ₹450, citing stable cigarette category trends, easing input costs and portfolio balance.
- Nuvama Institutional Equities: “Buy” rating; revised target price ₹534 (from ₹540), emphasising 6% cigarette volume growth, strong mix and margin gains.
- Motilal Oswal: “Buy” rating; target price ₹515, expecting cigarette EBIT margins to improve from Q4 FY26 and paperboard margins to bottom out.
Across these notes, the non‑cigarette FMCG business is repeatedly called out as a bright spot, while agri and paper are acknowledged as near‑term drags.
Consensus target ranges
Data aggregators tracking global and domestic research provide a useful overview:
- Trendlyne:
- Around 8 analysts / 18 reports
- Consensus target near ₹495–500, with highs around ₹560+ and lows in the mid‑₹430s, implying roughly 20–25% potential upside from current levels. [48]
- Investing.com / IndMoney:
- About 30–36 analysts in aggregate
- Average 12‑month target ~₹493, with a high of ₹567 and low of ₹425, and an overall rating of “Buy” / “Strong Buy”; implied upside in the low‑20% range versus a share price around ₹402–404. [49]
- TipRanks:
- A smaller sample (3 analysts) but similar message: “Strong Buy” with an average target around ₹480–485, suggesting high‑teens upside. [50]
TradingView’s fundamental snapshot adds: [51]
- Market cap: about ₹5.07 trillion
- EBITDA margin: ~34.7%
- Dividend yield (2024): 3.5%
- Stock performance: down about 9.75% over the last year
Interestingly, while fundamental analysts lean bullish, TradingView’s short‑term technical rating currently shows “strong sell” on daily indicators, with the one‑month view closer to “neutral”, suggesting near‑term momentum remains weak even as longer‑term fundamentals attract buyers. [52]
Overhang from British American Tobacco’s stake sale
Another theme shaping sentiment in 2025 has been British American Tobacco’s gradual stake reduction in ITC.
On May 28, 2025, BAT sold 313 million ITC shares (about 2.5% stake) via a block deal at ₹413 per share, raising roughly $1.5 billion. The sale price represented a 4.8% discount to ITC’s prior close of ₹433.90, and the stock fell nearly 3% to ₹421.70 in the immediate aftermath. [53]
Even after this sale (and a prior 3.5% stake sale in 2024), BAT still holds about 23.1% of ITC and remains the largest shareholder. [54]
Separately, Economic Times has reported that BAT may also begin a phased sale of its stake in ITC Hotels, reinforcing expectations of a gradual exit from the group’s hospitality interests. [55]
For ITC investors, these stake sales:
- Create periodic supply overhang, contributing to short‑term price weakness,
- But do not alter the company’s operating fundamentals, and may ultimately improve free float and index positioning as overhang recedes.
Key medium‑term drivers – and risks
1. Cigarette business: still the cash engine, but tax risk is back
Cigarettes remain ITC’s largest profit pool and a major revenue contributor. ITC is the market leader in Indian cigarettes, with a portfolio spanning mass to ultra‑premium brands. [56]
Positives:
- Volume growth of roughly 3–6% YoY in recent quarters, supported by stable taxation (until now) and a crackdown on illicit trade. [57]
- Premiumisation, as consumers trade up to differentiated and higher‑margin offerings. [58]
Risks:
- The proposed “Health Security se National Security” cess and excise framework could sharply increase tax incidence, especially on shorter‑length filter sticks where much of the value segment sits. [59]
- Historically, steep tax hikes have led to both down‑trading and illicit market growth, compressing legal volumes and margins.
Analysts currently assume stable to mildly rising cigarette taxes in their medium‑term models; if the final legislation proves significantly harsher, target prices and earnings estimates would likely be revised down.
2. FMCG (non‑cigarette): slow but steady compounding
ITC’s non‑cigarette FMCG business spans packaged foods (Aashirvaad, Sunfeast, Bingo), dairy, personal care (Savlon, Fiama), education & stationery (Classmate), agarbattis, matches and more. [60]
The segment:
- Has delivered high‑single‑digit revenue growth in recent quarters, even as margins have been pressured by input inflation and brand‑building spends. [61]
- Is benefiting from acquisitions and digital‑first brands (Yogabar, Mother Sparsh, Prasuma, Meatigo, 24 Mantra Organic), now together above ₹1,100 crore ARR, according to brokerage commentary. [62]
Brokerages broadly view FMCG as:
- A growth driver that can gradually dilute dependence on cigarettes,
- A business still in margin‑building mode, with upside as scale and mix improve over the next 3–5 years.
3. Agri, paper & packaging: volatile but strategically important
The Agri business is central to ITC’s rural sourcing and FMCG backend, but earnings are more volatile, driven by global commodity cycles and trade policies.
- Q1 FY26 showed strong upside with revenue +39% and PBIT +22% YoY, helped by favourable export opportunities. [63]
- Q2 FY26 saw a sharp 31% revenue decline due to a high base and shipment delays amid U.S. tariff uncertainty, though margins benefited from a favourable mix. [64]
Paperboards & Specialty Papers, plus packaging:
- Face pressure from low‑priced imports and higher wood costs, which dragged EBIT down around 20% in Q2 despite modest revenue growth. [65]
- Should gain scale and cost advantages if and when the Century Pulp & Paper (CPP) acquisition closes, adding 4.8 lakh tonnes of capacity and upstream integration. [66]
Analysts largely see these segments as cyclical but strategically supportive of the FMCG and sustainable packaging narrative.
4. Growth tempo and ESG headwinds
Some long‑only investors remain wary that ITC’s long‑term earnings growth may be capped around 10–12%, given regulatory constraints on cigarettes and the time it takes for FMCG to fully rerate. [67]
On top of that:
- Tobacco exposure keeps ITC off‑limits for certain ESG‑focused funds, limiting the potential investor base versus “pure‑play” consumer staples. [68]
This partly explains why ITC trades at a discount to other FMCG majors despite robust cash flows and a strong balance sheet.
What this means for investors
Putting all the pieces together as of December 1, 2025:
Positives
- Strong cash‑generating cigarette franchise with stable volumes and improving mix. [69]
- Growing non‑cigarette FMCG portfolio with a rising presence in premium, organic and digital‑first brands. [70]
- Strategic acquisitions (24 Mantra Organic, Century Pulp & Paper) and the hotels demerger sharpen the portfolio and support longer‑term growth. [71]
- Attractive dividend yield (~3.5%) and a history of generous payouts. [72]
- Valuations that are moderate relative to many Indian FMCG peers, with consensus analyst targets implying roughly 15–25% upside from current levels. [73]
Risks
- The proposed new tobacco cess and excise regime could materially impact cigarette volumes, pricing power and valuations if implemented at the higher end of indicated rates. [74]
- Ongoing BAT stake sales (and possible exit from ITC Hotels) create intermittent supply overhang. [75]
- Volatile agri and paper cycles can weigh on consolidated growth and margins in the short term. [76]
Given these cross‑currents, many analysts frame ITC as a high‑cash‑flow, dividend‑paying defensive with embedded optionality from FMCG, rather than as a hyper‑growth compounder. Whether that fits an individual portfolio depends heavily on tax‑regulation risk tolerance, ESG preferences and investment horizon. Anyone considering action on the stock should evaluate their own circumstances or speak with a licensed financial adviser.
What to watch next
Looking ahead, key milestones and catalysts for ITC watchers include:
- Parliamentary progress of the Central Excise Amendment Bill, 2025 and the “Health Security se National Security” Cess Bill, and any dilution in the final tax structure versus the initial proposals. [77]
- Regulatory approvals and eventual closure of the Century Pulp & Paper acquisition, and commentary on synergy realisation. [78]
- Integration of Sresta / 24 Mantra Organic into ITC’s FMCG network and the growth trajectory of its digital‑first brands portfolio. [79]
- The next earnings release, currently expected around January 30, 2026, where management guidance on taxation, cigarette volumes and FMCG margins will be closely scrutinised. [80]
In short, December 1, 2025 finds ITC at an interesting crossroads: the core business is steady, capital allocation is more focused, and analysts broadly see value—but all of that now has to be weighed against a fresh and very real tax overhang that the market will be pricing in quarter by quarter.
References
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