Fundamental Analysis of ITC Ltd

About the Company - ITC Ltd

ITC Ltd. is a Public Limited Listed company incorporated on 24/08/1910 and has its registered office in the State of West Bengal, India. Company’s Corporate Identification Number(CIN) is L16005WB1910PLC001985 and registration number is 001985. Currently company belongs to the Industry of Cigarettes & Tobacco Products. Company’s Total Operating Revenue is Rs. 56341.27 Cr. and Equity Capital is Rs. 1232.33 Cr. for the Year ended 31/03/2022.

INDUSTRY	ADDRESS	CONTACT
Cigarettes & Tobacco Products	Virginia House, 37, Jawaharlal Nehru Road, Kolkata West Bengal 700071	isc@itc.in http://www.itcportal.com

Management
Name	Position Held
Mr. Sanjiv Puri	Chairman & Managing Director
Mr. Nakul Anand	Executive Director
Mr. Sumant Bhargavan	Executive Director
Mr. Supratim Dutta	Executive Director & CFO
Mr. David Robert Simpson	Non Executive Director
Mr. Peter Rajatilakan Chittaranjan	Non Executive Director
Mr. Mukesh Gupta	Non Executive Director
Mr. Shyamal Mukherjee	Non Executive Director
Mr. Sunil Panray	Non Executive Director
Mr. Anand Nayak	Non Executive Director
Mr. Shilabhadra Banerjee	Non Executive Director
Mr. Arun Duggal	Non Executive Director
Ms. Meera Shankar	Non Executive Director
Ms. Nirupama Rao	Non Executive Director
Mr. Hemant Bhargava	Non Executive Director
Mr. Ajit Kumar Seth	Non Executive Director

Basic Stock Data of ITC Ltd

Last Updated: July 6, 2024, 11:59 am

Market Cap	5,41,598 Cr.
Current Price	434
High / Low	500/399
Stock P/E	26.5
Book Value	59.7
Dividend Yield	3.17 %
ROCE	37.5 %
ROE	28.4 %
Face Value	1.00
PEG Ratio	4.69

Competitors of ITC Ltd

Stock Name	Market Cap	Current Price	High / Low	Stock P/E	Book Value	Dividend Yield	ROCE	ROE	Face Value
VST Industries Ltd	6,331 Cr.	4,100	4,522/3,159	21.0	811	3.66 %	32.5 %	24.8 %	10.0
Industry Average	6,331.00 Cr	4,100.00		21.00	811.00	3.66%	32.50%	24.80%	10.00

ITC Ltd Quarterly Results

Month	Mar 2021	Jun 2021	Sep 2021	Dec 2021	Mar 2022	Jun 2022	Sep 2022	Dec 2022	Mar 2023	Jun 2023	Sep 2023	Dec 2023	Mar 2024
Sales	14,342	13,247	13,757	17,108	16,556	18,489	17,108	17,705	17,635	17,164	17,774	18,019	17,923
Expenses	9,471	8,804	8,740	11,510	10,956	12,412	10,849	11,000	11,011	10,494	11,320	11,516	11,296
Operating Profit	4,871	4,444	5,018	5,598	5,599	6,077	6,259	6,705	6,624	6,670	6,454	6,504	6,626
OPM %	34%	34%	36%	33%	34%	33%	37%	38%	38%	39%	36%	36%	37%
Other Income	579	447	469	422	499	321	455	595	683	722	665	651	682
Interest	3	9	10	10	11	9	13	9	12	10	10	14	13
Depreciation	409	414	422	430	467	438	462	447	461	442	453	459	461
Profit before tax	5,039	4,467	5,055	5,580	5,620	5,950	6,239	6,844	6,833	6,940	6,656	6,682	6,834
Tax %	24%	25%	26%	26%	24%	25%	25%	26%	24%	25%	26%	19%	24%
Net Profit	3,820	3,344	3,766	4,127	4,266	4,472	4,682	5,080	5,243	5,190	4,965	5,407	5,191
EPS in Rs	3.05	2.66	3.01	3.29	3.40	3.56	3.73	4.03	4.16	4.10	3.93	4.28	4.10

Last Updated: June 7, 2024, 8:59 am

ITC Ltd Quarterly Chart

ITC Ltd Profit & Loss

Month	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023	TTM
Sales	26,516	31,618	35,306	38,817	39,192	42,768	43,449	48,340	49,388	49,257	60,645	70,919	70,278
Expenses	17,272	20,398	22,227	24,566	24,661	27,298	26,928	29,802	30,044	32,193	40,021	45,215	43,825
Operating Profit	9,244	11,221	13,080	14,252	14,531	15,470	16,521	18,537	19,344	17,065	20,623	25,704	26,453
OPM %	35%	35%	37%	37%	37%	36%	38%	38%	39%	35%	34%	36%	38%
Other Income	772	852	966	1,229	1,483	1,759	2,240	2,080	2,417	2,577	1,910	2,098	2,665
Interest	102	108	29	91	78	49	115	71	81	58	60	78	41
Depreciation	745	859	965	1,028	1,077	1,153	1,236	1,397	1,645	1,646	1,732	1,809	1,804
Profit before tax	9,168	11,106	13,052	14,362	14,859	16,026	17,409	19,150	20,035	17,938	20,740	25,915	27,273
Tax %	31%	31%	31%	32%	36%	35%	34%	33%	22%	25%	25%	25%
Net Profit	6,334	7,704	9,001	9,779	9,501	10,477	11,493	12,836	15,593	13,383	15,503	19,477	20,477
EPS in Rs	5.34	6.42	7.45	8.04	7.74	8.47	9.24	10.27	12.45	10.69	12.37	15.44	16.22
Dividend Payout %	56%	55%	54%	52%	73%	56%	56%	56%	82%	101%	93%	100%

ITC Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth

Year	2013-2014	2014-2015	2015-2016	2016-2017	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
YoY Net Profit Growth (%)	16.84%	8.64%	-2.84%	10.27%	9.70%	11.69%	21.48%	-14.17%	15.84%	25.63%	6.54%
Change in YoY Net Profit Growth (%)	0.00%	-8.19%	-11.49%	13.12%	-0.58%	1.99%	9.79%	-35.65%	30.01%	9.79%	-19.09%

ITC Ltd Growth

Compounded Sales Growth
10 Years:	8%
5 Years:	10%
3 Years:	13%
TTM:	1%

Compounded Profit Growth
10 Years:	10%
5 Years:	12%
3 Years:	7%
TTM:	12%

Stock Price CAGR
10 Years:	7%
5 Years:	8%
3 Years:	30%
1 Year:	3%

Return on Equity
10 Years:	25%
5 Years:	25%
3 Years:	25%
Last Year:	29%

Last Updated: May 2, 2024, 5:39 am

ITC Ltd Balance Sheet

Month	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Sep 2023
Equity Capital	782	790	795	802	805	1,215	1,220	1,226	1,229	1,231	1,232	1,243	1,247
Reserves	18,677	22,368	26,442	30,934	41,875	45,198	51,290	57,915	64,044	59,116	61,223	67,912	67,852
Borrowings	118	102	242	269	84	46	36	13	277	271	249	306	284
Other Liabilities	10,509	12,069	13,369	13,948	8,888	9,440	11,695	12,585	11,760	13,143	14,491	16,370	17,754
Total Liabilities	30,085	35,329	40,848	45,952	51,651	55,898	64,241	71,739	77,311	73,761	77,196	85,831	87,137
Fixed Assets	10,007	12,140	12,921	15,303	15,107	15,893	16,524	19,374	21,713	23,298	24,232	25,851	26,303
CWIP	2,396	2,062	3,117	2,700	2,560	3,730	5,508	4,136	3,256	4,011	3,226	3,003	3,190
Investments	5,207	5,981	7,284	6,943	11,748	17,581	22,053	25,043	28,663	24,871	24,841	29,415	26,637
Other Assets	12,475	15,146	17,526	21,006	22,237	18,694	20,156	23,185	23,678	21,580	24,898	27,561	31,007
Total Assets	30,085	35,329	40,848	45,952	51,651	55,898	64,241	71,739	77,311	73,761	77,196	85,831	87,137

ITC Ltd Reserves and Borrowings Chart

ITC Ltd Cash Flow

Month	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023
Cash from Operating Activity	6,256	7,102	7,344	9,843	9,799	10,627	13,169	12,583	14,690	12,527	15,776	18,878
Cash from Investing Activity	-2,694	-3,881	-3,254	-5,275	-3,921	-3,251	-7,114	-5,546	-6,174	5,740	-2,238	-5,732
Cash from Financing Activity	-3,305	-3,310	-4,122	-4,661	-5,613	-7,301	-6,221	-6,869	-8,181	-18,634	-13,580	-13,006
Net Cash Flow	257	-90	-32	-93	266	75	-166	169	334	-367	-43	139

ITC Ltd Free Cash Flow

Month	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024
Free Cash Flow	-91.00	-229.00	-255.00	-70.00	-31.00	-20.00	5.00	-258.00	-254.00	-229.00	-281.00	-277.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

ITC Ltd Free Cash Flow Chart

ITC Ltd Financial Efficiency Indicators

Month	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024
Debtor Days	16	25	19	18	21	23	30	19	19	15	15	21
Inventory Days	227	228	212	244	185	173	165	187	189	150	148	190
Days Payable	53	58	50	63	60	80	74	76	78	61	59	64
Cash Conversion Cycle	189	195	181	199	145	115	122	129	129	104	105	146
Working Capital Days	-5	9	-4	52	45	31	32	35	36	31	20	104
ROCE %	51%	50%	47%	40%	36%	34%	34%	32%	28%	33%	39%

ITC Ltd Financial Efficiency Indicators Chart

ITC Ltd Share Holding Pattern

Month	Jun 2021	Sep 2021	Dec 2021	Mar 2022	Jun 2022	Sep 2022	Dec 2022	Mar 2023	Jun 2023	Sep 2023	Dec 2023	Mar 2024
FIIs	11.74%	10.81%	9.99%	11.99%	12.68%	42.68%	42.99%	43.35%	43.62%	43.34%	43.26%	40.95%
DIIs	42.40%	43.72%	43.79%	42.77%	42.82%	42.38%	42.19%	42.08%	41.92%	41.94%	41.98%	43.76%
Government	0.00%	0.00%	0.00%	0.00%	0.00%	0.04%	0.04%	0.04%	0.04%	0.04%	0.04%	0.04%
Public	45.86%	45.47%	46.22%	45.24%	44.50%	14.87%	14.78%	14.52%	14.41%	14.68%	14.71%	15.23%
No. of Shareholders	26,30,128	25,68,030	29,97,699	28,40,964	28,38,036	28,96,358	29,36,692	29,30,527	30,13,793	32,74,360	33,35,815	36,48,537

ITC Ltd Shareholding Pattern Chart

No. of ITC Ltd Shareholders

ITC Ltd Mutual Fund Holdings

Fund Name	No of Shares	AUM (%)	Amount Invested (Cr)	Previous Number of Shares	Previous Date	Percentage Change
SBI Nifty 50 ETF	159,932,701	3.88	6967.47	73,539,750	2024-07-05	117.48%
SBI S&P BSE Sensex ETF	120,546,469	4.78	5251	73,539,750	2024-07-05	63.92%
Parag Parikh Flexi Cap Fund	73,539,750	5.01	3203.76	73,539,750	2024-07-05	0%
ICICI Prudential Bharat 22 ETF	63,811,442	15.49	2779.63	73,539,750	2024-07-05	-13.23%
SBI Blue Chip Fund	50,300,000	4.83	2191.32	73,539,750	2024-07-05	-31.6%
UTI Nifty 50 ETF	45,721,540	3.88	1991.86	73,539,750	2024-07-05	-37.83%
UTI S&P BSE Sensex ETF	43,226,668	4.78	1882.95	73,539,750	2024-07-05	-41.22%
HDFC Balanced Advantage Fund - Regular Plan	41,497,726	2.16	1807.85	73,539,750	2024-07-05	-43.57%
ICICI Prudential Balanced Advantage Fund	37,560,717	2.89	1636.33	73,539,750	2024-07-05	-48.92%
Nippon India Large Cap Fund	35,050,240	5.84	1526.96	73,539,750	2024-07-05	-52.34%

ITC Ltd ROCE Trend

ITC Ltd EPS Trend

ITC Ltd Key Financial Ratios

Month	Mar 24	Mar 23	Mar 22	Mar 21	Mar 20
FaceValue	1.00	1.00	1.00	1.00	1.00
Basic EPS (Rs.)	16.42	15.50	12.37	10.70	12.47
Diluted EPS (Rs.)	16.38	15.46	12.37	10.70	12.45
Cash EPS (Rs.)	18.05	17.09	13.97	12.22	14.02
Book Value[Excl.RevalReserv]/Share (Rs.)	59.99	55.95	50.98	49.31	53.41
Book Value[Incl.RevalReserv]/Share (Rs.)	59.99	55.95	50.98	49.31	53.41
Revenue From Operations / Share (Rs.)	61.55	57.08	49.23	40.03	40.19
PBDIT / Share (Rs.)	23.21	22.24	18.25	15.95	17.78
PBIT / Share (Rs.)	21.76	20.79	16.85	14.62	16.44
PBT / Share (Rs.)	21.72	20.81	16.82	14.58	16.29
Net Profit / Share (Rs.)	16.60	15.63	12.57	10.88	12.68
NP After MI And SOA / Share (Rs.)	16.39	15.44	12.37	10.69	12.45
PBDIT Margin (%)	37.71	38.97	37.07	39.85	44.24
PBIT Margin (%)	35.35	36.42	34.22	36.51	40.91
PBT Margin (%)	35.28	36.46	34.15	36.41	40.53
Net Profit Margin (%)	26.96	27.38	25.52	27.17	31.54
NP After MI And SOA Margin (%)	26.62	27.05	25.12	26.71	30.98
Return on Networth / Equity (%)	27.45	27.75	24.40	21.80	23.44
Return on Capital Employeed (%)	34.76	35.81	31.89	28.49	29.80
Return On Assets (%)	22.27	22.34	19.72	17.82	19.78
Asset Turnover Ratio (%)	0.86	0.82	0.75	0.61	0.62
Current Ratio (X)	3.00	2.89	2.81	3.27	4.13
Quick Ratio (X)	1.97	2.02	1.91	2.29	3.19
Inventory Turnover Ratio (X)	1.67	1.84	1.57	1.48	1.64
Dividend Payout Ratio (NP) (%)	0.00	38.81	42.44	46.74	46.05
Dividend Payout Ratio (CP) (%)	0.00	35.46	38.11	41.55	41.58
Earning Retention Ratio (%)	0.00	61.19	57.56	53.26	53.95
Cash Earning Retention Ratio (%)	0.00	64.54	61.89	58.45	58.42
Interest Coverage Ratio (X)	630.60	639.94	571.51	440.45	399.74
Interest Coverage Ratio (Post Tax) (X)	452.07	449.03	394.44	301.35	288.43
Enterprise Value (Cr.)	528208.39	472093.81	304785.83	264644.53	204533.29
EV / Net Operating Revenue (X)	6.87	6.66	5.02	5.37	4.14
EV / EBITDA (X)	18.23	17.08	13.55	13.48	9.36
MarketCap / Net Operating Revenue (X)	6.96	6.72	5.09	5.46	4.28
Retention Ratios (%)	0.00	61.18	57.55	53.25	53.94
Price / BV (X)	7.18	6.89	4.95	4.46	3.24
Price / Net Operating Revenue (X)	6.96	6.72	5.09	5.46	4.28
EarningsYield	0.03	0.04	0.04	0.04	0.07

ITC Ltd Profitability Ratios (%)

ITC Ltd Liquidity Ratios

ITC Ltd Liquidity Ratios (%)

ITC Ltd Interest Coverage Ratios (%)

ITC Ltd Valuation Ratios

Fair Value

Fair Value: 463.55

Calculation basis:

Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

Undervalued: 6.81% compared to the current price 434

Intrinsic Value: 489.75

Calculation basis:

Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators along with EPS growth.

Undervalued: 12.85% compared to the current price ₹434

Last 5 Year EPS CAGR: 5.65%

*Investments are subject to market risks

Strength and Weakness of ITC Ltd Stock

Strength	Weakness
The stock has a high average ROCE of 35.33%, which is a positive sign. The company has higher reserves (50,131.33 cr) compared to borrowings (183.17 cr), indicating strong financial stability. The company has shown consistent growth in sales (47.83 cr) and profit (17.75 cr) over the years.	The stock has a high average Working Capital Days of 32.17, which may not be favorable. The stock has a high average Cash Conversion Cycle of 146.58, which may not be favorable.

Should I Buy ITC Ltd Share Now?

Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in ITC Ltd:
1. ✓ Net Profit Margin: 26.96%
  - Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
2. ROCE: 34.76% (Industry Average ROCE: %)
  - ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
3. ROE%: 27.45% (Industry Average ROE: %)
  - ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
4. ✓ Interest Coverage Ratio (Post Tax): 452.07
  - Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
5. Quick Ratio: 1.97
  - Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
6. ✗ Stock P/E: 26.5 (Industry average Stock P/E: )
  - Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
7. ✗ Total Debt / Equity: N/A
  - Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
Stock Rating: ★★★★☆

FAQ

What is the latest fair value of ITC Ltd?

The latest fair value of ITC Ltd is ₹463.55.

What is the Market Cap of ITC Ltd?

The Market Cap of ITC Ltd is 5,41,598 Cr..

What is the current Stock Price of ITC Ltd as on 06 July 2024?

The current stock price of ITC Ltd as on 06 July 2024 is 434.

What is the High / Low of ITC Ltd stocks in FY 2024?

In FY 2024, the High / Low of ITC Ltd stocks is 500/399.

What is the Stock P/E of ITC Ltd?

The Stock P/E of ITC Ltd is 26.5.

What is the Book Value of ITC Ltd?

The Book Value of ITC Ltd is 59.7.

What is the Dividend Yield of ITC Ltd?

The Dividend Yield of ITC Ltd is 3.17 %.

What is the ROCE of ITC Ltd?

The ROCE of ITC Ltd is 37.5 %.

What is the ROE of ITC Ltd?

The ROE of ITC Ltd is 28.4 %.

What is the Face Value of ITC Ltd?

The Face Value of ITC Ltd is 1.00.