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ITC Limited Posts First Annual Loss Since 2020
ITC Limited, a prominent Indian conglomerate, concluded the year 2025 with a significant financial marker: its first negative yearly return since 2020. The company's stock finished the year with a notable decline of 12 percent, a stark contrast to the robust positive performance witnessed in the intervening years. This downturn marks a shift for the diversified business group, which had enjoyed a period of strong recovery and growth following the pandemic-induced slump.
On Wednesday, December 31, 2025, ITC shares closed marginally higher by 0.52 percent at ₹402.70 on the National Stock Exchange (NSE). However, this daily uptick could not offset the broader yearly trend, cementing 2025 as a year of negative returns for ITC shareholders. The last time the stock delivered a negative annual return was in 2020, when it fell by approximately 9 percent. The subsequent years saw a significant turnaround.
A Look Back at Recent Performance
Following the 2020 dip, ITC embarked on a recovery path. In 2021, the stock managed a modest gain of 4.5 percent. The year 2022 proved exceptionally strong, with ITC shares surging by an impressive 43 percent. This momentum carried into 2023, delivering another substantial surge of 40 percent. While 2024 saw a moderation, the stock still posted a positive gain of around 5 percent. At one point during 2024, ITC shares had shown a remarkable increase of over 200 percent from their 2020 lows, underscoring the significant recovery before the 2025 pullback.
Strategic Demerger of Hotel Business
The year 2025 was also pivotal for ITC from a strategic business standpoint. The Kolkata-headquartered company successfully demerged its hotels business, a significant move that led to the separate listing of ITC Hotels Ltd. This demerger is expected to unlock value and allow for more focused growth strategies for both the demerged entity and ITC's remaining core businesses.
Expert Analysis and Outlook
Industry experts continue to express a long-term bullish outlook on ITC Limited. Rajesh Agarwal, Head of Equity Research at AUM Capital, stated that he has consistently recommended buying ITC shares, having been bullish on the stock since it traded around the ₹150 levels. He acknowledged that ITC often experiences periods of stagnation but emphasized that these are not indicative of fundamental issues within the company.
Agarwal asserted, "Fundamentally, ITC is a very strong company. There is no doubt about that." He identified taxation on cigarettes as a persistent concern but noted it has not detrimentally impacted the company's other business segments. He also highlighted the steady and healthy volume growth within ITC's Fast-Moving Consumer Goods (FMCG) business. Furthermore, ITC maintains a robust balance sheet, is debt-free, generates positive cash flow, and consistently rewards shareholders with good dividends.
"ITC is well suited for investors looking for stable returns over the long term," Agarwal advised. "For investors with a long-term horizon and who want low risk, ITC remains a good stock to own in the portfolio." He suggested that the current stock price, hovering around the ₹400 mark, presents an attractive opportunity for long-term investors to add the stock to their portfolios. His recommendation is to hold ITC shares for sustained wealth creation.
Financial Performance Snapshot
In the September 2025 quarter, ITC Limited reported a consolidated net profit of ₹5,186.55 crore. Its revenue from operations for the same period stood at ₹21,255.86 crore, indicating continued operational strength amidst the stock market's performance.
Impact
This news may lead to cautious investor sentiment in the short term, potentially affecting ITC's stock price. However, the underlying fundamental strengths, strategic demerger, and positive expert recommendations suggest that long-term investors may view the current price level as an attractive entry point. The company's resilience across its diverse business segments, particularly FMCG, provides a foundation for future growth.
Impact Rating: 7/10
Difficult Terms Explained
Demerged: The process where a company separates one of its business divisions to create a new, independent company. This allows for focused management and potentially greater shareholder value. In this case, ITC separated its hotel business.
FMCG (Fast-Moving Consumer Goods): These are products that are sold quickly and at a relatively low cost, such as packaged foods, toiletries, and beverages. ITC has a significant presence in this sector.
Consolidated Net Profit: This is the total profit of a parent company and all its subsidiaries after deducting all expenses, interest, and taxes. It provides a comprehensive view of the group's profitability.
Revenue from Operations: This figure represents the total income generated by a company from its primary business activities, excluding any non-operational income.
Dividends: A portion of a company's profits distributed to its shareholders. ITC is known for regularly paying good dividends.