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Last Updated on: 21 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 500875 | NSE: ITC

ITC Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 20, 2024, 9:55 pm

Market Cap 5,84,640 Cr.
Current Price 467
High / Low529/399
Stock P/E28.4
Book Value 60.2
Dividend Yield2.94 %
ROCE37.5 %
ROE28.4 %
Face Value 1.00
PEG Ratio5.02

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for ITC Ltd

Competitors of ITC Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
VST Industries Ltd 5,405 Cr. 318487/29222.2 66.74.29 %32.2 %24.6 % 10.0
ITC Ltd 5,84,640 Cr. 467529/39928.4 60.22.94 %37.5 %28.4 % 1.00
Godfrey Phillips India Ltd 31,142 Cr. 5,9868,480/2,00533.0 9060.94 %22.2 %19.0 % 2.00
Industry Average207,062.33 Cr2,257.0027.87344.302.72%30.63%24.00%4.33

All Competitor Stocks of ITC Ltd

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales14,34213,24713,75717,10816,55618,48917,10817,70517,63517,16417,77418,01917,923
Expenses9,4718,8048,74011,51010,95612,41210,84911,00011,01110,49411,32011,51611,296
Operating Profit4,8714,4445,0185,5985,5996,0776,2596,7056,6246,6706,4546,5046,626
OPM %34%34%36%33%34%33%37%38%38%39%36%36%37%
Other Income579447469422499321455595683722665651682
Interest3910101191391210101413
Depreciation409414422430467438462447461442453459461
Profit before tax5,0394,4675,0555,5805,6205,9506,2396,8446,8336,9406,6566,6826,834
Tax %24%25%26%26%24%25%25%26%24%25%26%19%24%
Net Profit3,8203,3443,7664,1274,2664,4724,6825,0805,2435,1904,9655,4075,191
EPS in Rs3.052.663.013.293.403.563.734.034.164.103.934.284.10

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales31,61835,30638,81739,19242,76843,44948,34049,38849,25760,64570,91970,881
Expenses20,39822,22724,56624,66127,29826,92829,80230,04432,19340,02145,21544,627
Operating Profit11,22113,08014,25214,53115,47016,52118,53719,34417,06520,62325,70426,254
OPM %35%37%37%37%36%38%38%39%35%34%36%37%
Other Income8529661,2291,4831,7592,2402,0802,4172,5771,9102,0982,720
Interest10829917849115718158607846
Depreciation8599651,0281,0771,1531,2361,3971,6451,6461,7321,8091,816
Profit before tax11,10613,05214,36214,85916,02617,40919,15020,03517,93820,74025,91527,112
Tax %31%31%32%36%35%34%33%22%25%25%25%24%
Net Profit7,7049,0019,7799,50110,47711,49312,83615,59313,38315,50319,47720,751
EPS in Rs6.427.458.047.748.479.2410.2712.4510.6912.3715.4416.39
Dividend Payout %55%54%52%73%56%56%56%82%101%93%100%84%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
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 has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:7%
5 Years:8%
3 Years:13%
TTM:7%
Compounded Profit Growth
10 Years:9%
5 Years:10%
3 Years:16%
TTM:2%
Stock Price CAGR
10 Years:6%
5 Years:13%
3 Years:26%
1 Year:4%
Return on Equity
10 Years:25%
5 Years:26%
3 Years:28%
Last Year:28%

Last Updated: Unknown

Balance Sheet

Last Updated: November 14, 2024, 10:32 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital7907958028051,2151,2201,2261,2291,2311,2321,2431,2481,251
Reserves22,36826,44230,93441,87545,19851,29057,91564,04459,11661,22367,91273,25974,015
Borrowings10224226984463613277271249306303304
Other Liabilities12,06913,36913,9488,8889,44011,69512,58511,76013,14314,49116,37016,94418,501
Total Liabilities35,32940,84845,95251,65155,89864,24171,73977,31173,76177,19685,83191,75494,071
Fixed Assets12,14012,92115,30315,10715,89316,52419,37421,71323,29824,23225,85127,82029,492
CWIP2,0623,1172,7002,5603,7305,5084,1363,2564,0113,2263,0032,8611,387
Investments5,9817,2846,94311,74817,58122,05325,04328,66324,87124,84129,41531,11428,409
Other Assets15,14617,52621,00622,23718,69420,15623,18523,67821,58024,89827,56129,95934,784
Total Assets35,32940,84845,95251,65155,89864,24171,73977,31173,76177,19685,83191,75494,071

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +7,1027,3449,8439,79910,62713,16912,58314,69012,52715,77618,87817,179
Cash from Investing Activity +-3,881-3,254-5,275-3,921-3,251-7,114-5,546-6,1745,740-2,238-5,7321,563
Cash from Financing Activity +-3,310-4,122-4,661-5,613-7,301-6,221-6,869-8,181-18,634-13,580-13,006-18,551
Net Cash Flow-90-32-9326675-166169334-367-43139191

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-91.00-229.00-255.00-70.00-31.00-20.005.00-258.00-254.00-229.00-281.00-277.00

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.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days162519182123301919151521
Inventory Days227228212244185173165187189150148190
Days Payable535850636080747678615964
Cash Conversion Cycle189195181199145115122129129104105146
Working Capital Days-59-4524531323536312038
ROCE %51%50%47%40%36%34%34%32%28%33%39%37%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024Sep 2024
FIIs9.99%11.99%12.68%42.68%42.99%43.35%43.62%43.34%43.26%40.95%40.47%40.53%
DIIs43.79%42.77%42.82%42.38%42.19%42.08%41.92%41.94%41.98%43.76%44.02%44.59%
Government0.00%0.00%0.00%0.04%0.04%0.04%0.04%0.04%0.04%0.04%0.04%0.04%
Public46.22%45.24%44.50%14.87%14.78%14.52%14.41%14.68%14.71%15.23%15.47%14.83%
No. of Shareholders29,97,69928,40,96428,38,03628,96,35829,36,69229,30,52730,13,79332,74,36033,35,81536,48,53737,56,54135,68,560

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Nifty 50 ETF159,932,7013.886967.4750,300,0002024-11-20217.96%
SBI S&P BSE Sensex ETF120,546,4694.78525150,300,0002024-11-20139.66%
Parag Parikh Flexi Cap Fund73,539,7505.013203.7650,300,0002024-11-2046.2%
ICICI Prudential Bharat 22 ETF63,811,44215.492779.6350,300,0002024-11-2026.86%
SBI Blue Chip Fund50,300,0004.832191.3250,300,0002024-11-200%
UTI Nifty 50 ETF45,721,5403.881991.8650,300,0002024-11-20-9.1%
UTI S&P BSE Sensex ETF43,226,6684.781882.9550,300,0002024-11-20-14.06%
HDFC Balanced Advantage Fund - Regular Plan41,497,7262.161807.8550,300,0002024-11-20-17.5%
ICICI Prudential Balanced Advantage Fund37,560,7172.891636.3350,300,0002024-11-20-25.33%
Nippon India Large Cap Fund35,050,2405.841526.9650,300,0002024-11-20-30.32%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)16.4215.5012.3710.7012.47
Diluted EPS (Rs.)16.3815.4612.3710.7012.45
Cash EPS (Rs.)18.0517.0913.9712.2214.02
Book Value[Excl.RevalReserv]/Share (Rs.)59.9955.9550.9849.3153.41
Book Value[Incl.RevalReserv]/Share (Rs.)59.9955.9550.9849.3153.41
Revenue From Operations / Share (Rs.)56.7757.0849.2340.0340.19
PBDIT / Share (Rs.)23.2122.2418.2515.9517.78
PBIT / Share (Rs.)21.7620.7916.8514.6216.44
PBT / Share (Rs.)21.7220.8116.8214.5816.29
Net Profit / Share (Rs.)16.6015.6312.5710.8812.68
NP After MI And SOA / Share (Rs.)16.3915.4412.3710.6912.45
PBDIT Margin (%)40.8838.9737.0739.8544.24
PBIT Margin (%)38.3236.4234.2236.5140.91
PBT Margin (%)38.2536.4634.1536.4140.53
Net Profit Margin (%)29.2327.3825.5227.1731.54
NP After MI And SOA Margin (%)28.8627.0525.1226.7130.98
Return on Networth / Equity (%)27.4527.7524.4021.8023.44
Return on Capital Employeed (%)34.7635.8131.8928.4929.80
Return On Assets (%)22.2722.3419.7217.8219.78
Asset Turnover Ratio (%)0.790.820.750.610.62
Current Ratio (X)3.002.892.813.274.13
Quick Ratio (X)1.952.021.912.293.19
Inventory Turnover Ratio (X)1.661.841.571.481.64
Dividend Payout Ratio (NP) (%)41.0038.8142.4446.7446.05
Dividend Payout Ratio (CP) (%)37.6635.4638.1141.5541.58
Earning Retention Ratio (%)59.0061.1957.5653.2653.95
Cash Earning Retention Ratio (%)62.3464.5461.8958.4558.42
Interest Coverage Ratio (X)630.60639.94571.51440.45399.74
Interest Coverage Ratio (Post Tax) (X)452.07449.03394.44301.35288.43
Enterprise Value (Cr.)528208.39472093.81304785.83264644.53204533.29
EV / Net Operating Revenue (X)7.456.665.025.374.14
EV / EBITDA (X)18.2317.0813.5513.489.36
MarketCap / Net Operating Revenue (X)7.556.725.095.464.28
Retention Ratios (%)58.9961.1857.5553.2553.94
Price / BV (X)7.186.894.954.463.24
Price / Net Operating Revenue (X)7.556.725.095.464.28
EarningsYield0.030.040.040.040.07

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of ITC Ltd as of November 21, 2024 is: 499.82

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.

As of November 21, 2024, ITC Ltd is Undervalued by 7.03% compared to the current share price 467.00

Intrinsic Value of ITC Ltd as of November 21, 2024 is: 528.07

Calculation basis:

  • Intrinsic 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 intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 21, 2024, ITC Ltd is Undervalued by 13.08% compared to the current share price 467.00

Last 5 Year EPS CAGR: 5.65%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 38.42%, which is a positive sign.
  2. The stock has a low average Working Capital Days of 26.67, which is a positive sign.
  3. The company has higher reserves (51,968.54 cr) compared to borrowings (192.46 cr), indicating strong financial stability.
  4. The company has shown consistent growth in sales (47.83 cr) and profit (17.75 cr) over the years.
  1. The stock has a high average Cash Conversion Cycle of 146.58, which may not be favorable.

Stock Analysis

  • 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: 29.23%
      • 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: 30.63%)
      • 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: 24%)
      • 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: 1.95
      • 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: 28.4 (Industry average Stock P/E: 27.87)
      • 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: 0
      • 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:

About the Company - Qualitative Analysis

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.
INDUSTRYADDRESSCONTACT
Cigarettes & Tobacco ProductsVirginia House, 37, Jawaharlal Nehru Road, Kolkata West Bengal 700071isc@itc.in
http://www.itcportal.com
Management
NamePosition Held
Mr. Sanjiv PuriChairman & Managing Director
Mr. Hemant MalikExecutive Director
Mr. Sumant BhargavanExecutive Director
Mr. Supratim DuttaExecutive Director & CFO
Mr. Ajit Kumar SethNon Executive Director
Mr. Mukesh GuptaNon Executive Director
Mr. Shyamal MukherjeeNon Executive Director
Mr. Sunil PanrayNon Executive Director
Mr. Anand NayakNon Executive Director
Mr. Shilabhadra BanerjeeNon Executive Director
Mr. Arun DuggalNon Executive Director
Ms. Meera ShankarNon Executive Director
Ms. Nirupama RaoNon Executive Director
Mr. Hemant BhargavaNon Executive Director
Mr. Alka Marezban BharuchaNon Executive Director
Mr. Atul SinghNon Executive Director
Mr. Pushpa SubrahmanyamNon Executive Director

FAQ

What is the latest intrinsic value of ITC Ltd?

The latest intrinsic value of ITC Ltd as on 21 November 2024 is ₹499.82, which is 7.03% higher than the current market price of ₹467.00.

What is the Market Cap of ITC Ltd?

The Market Cap of ITC Ltd is 5,84,640 Cr..

What is the current Stock Price of ITC Ltd as on 21 November 2024?

The current stock price of ITC Ltd as on 21 November 2024 is ₹467.

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

In FY 2024, the High / Low of ITC Ltd stocks is 529/399.

What is the Stock P/E of ITC Ltd?

The Stock P/E of ITC Ltd is 28.4.

What is the Book Value of ITC Ltd?

The Book Value of ITC Ltd is 60.2.

What is the Dividend Yield of ITC Ltd?

The Dividend Yield of ITC Ltd is 2.94 %.

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.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in ITC Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE