India's ITC posts quarterly profit fall on higher expenses, one-time labour code charge (updated)

ITC

29/01/2026 13:23

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Jan 29 (Reuters) - Indian consumer goods conglomerate ITC ITC.NS reported a 10% fall in quarterly profit on Thursday, hurt by higher raw material costs and a one-time charge tied to the country's new labour codes.

The company, which also sells instant noodles and other food products, said its standalone quarterly profit fell to 50.89 billion rupees ($553.68 million) for the quarter ended December 31, from 56.38 billion rupees a year ago.

The company took a one-time charge of 2.74 billion rupees tied to the country's new labour codes.

        India's new labour codes — the country's biggest overhaul of workers' laws in decades — have dragged profits of corporate firms across sectors, from Godrej Consumer Products GOCP.NS and Mahindra Holidays and Resorts India MAHH.NS to Wipro WIPR.NS and Infosys INFY.NS.

        ITC's total expenses, too, rose 5% to 134.72 billion rupees due in part to higher prices of raw materials including edible oil, wheat and leaf tobacco.

        Leaf tobacco prices have climbed in recent quarters at a time when export demand has picked up, weighing on ITC's profitability even as cigarette volumes have held up for India's market leader.

Revenue from the cigarettes business, ITC's largest segment, grew 8% in the third quarter. The company's consumer goods segment, which houses popular household brands such as Aashirvaad flour, Sunfeast biscuits and Yippee noodles, grew 11%.

Overall revenue rose 6% to 193.59 billion rupees.

However, ITC faces further pressure as India has imposed excise duty on cigarettes in addition to a 40% goods and services tax in a move that could increase prices of cigarettes for an estimated 100 million smokers in the country.

        "Such a steep increase will provide further impetus to illicit trade," ITC said in a statement.

($1 = 91.9130 Indian rupees)

 (Reporting by Komal Salecha in Bengaluru and Praveen Paramasivam in Chennai; Editing by Janane Venkatraman and Shailesh Kuber)

 ((Komal@thomsonreuters.com;))