ITC LimitedFundamental Analysis

Presented By: Savi Arora

ITC Limited Profile

ITC is one of the India’s foremost private sector companies with a market capitalization of $45 billion and a turnover of $7 billion.

ITC was incorporated in August 24, 9010.

Creating Multiple Drivers of Growth

Industry - Position

Industry - competitors

ITC – Financials

Return on Equity [RoE] – DuPoint Analysis

𝑃𝐴𝑇

𝐸𝑞𝑢𝑖𝑡𝑦=

𝑃𝐴𝑇

𝑃𝐵𝑇𝑥

𝑃𝐵𝑇

𝐸𝐵𝐼𝑇𝑥𝐸𝐵𝐼𝑇

𝑆𝑎𝑙𝑒𝑠𝑥𝑆𝑎𝑙𝑒𝑠

𝐴𝑠𝑠𝑒𝑡𝑥

𝐴𝑠𝑠𝑒𝑡

𝐸𝑞𝑢𝑖𝑡𝑦

Return on Equity = Tax burden 𝑥 Int. Burden 𝑥 Margin 𝑥 Efficiency 𝑥 Leverage

8990

27236=

8990

13051𝑥13051

13058𝑥13058

31323𝑥31323

34984𝑥34984

27236

.33 = .688 𝑥 .99 𝑥 .416 𝑥 .89 𝑥 1.28

Ratios

• EPS

𝐸𝑃𝑆 =𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥

𝐹𝑎𝑐𝑒𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠=

8990

795.32= 11.3

• Price Earning

𝑃𝐸 =𝑀𝑃𝑆

𝐸𝑃𝑆=

351

11.3= 31 𝑡𝑖𝑚𝑒𝑠

• Dividend per share

𝐷𝑃𝑆 =𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑖𝑑

𝑁𝑜 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠=

3960.92

795.32= 4.98

• Dividend payout ratio

𝐷𝑃𝑅 =𝐷𝑃𝑆

𝐸𝑃𝑆=

4.98

11.3= 44%

• Dividend yield ratio

𝐷𝑌𝑅 =𝐷𝑃𝑆

𝑀𝑃𝑆=

4.98

351= 1.42%

1 year Price Graph

ITC- Key Fundamentals

• Market Cap (Rs Cr.):279,654

• EPS - TTM (Rs):11.41

• P/E Ratio (x):30.83

• Face Value (Rs):1.00

• Latest Div. (%):600.00

• Div. Yield (%):1.70

• Book Value / sh. (Rs) :32.97

• P/B Ratio (x):10.65

News:

September 10, 2014Government likely to ban sale of loose cigarettes, Rs 20000 fine for smoking in public – a move that will hit ITC and other cigarette makers hard as 70 per cent of retail takes place in this form.

Effect:Shares of cigarette companies ITC, Godfrey Phillips India and VST Industries fell by as much as 6 per cent amid media reports that the government may tighten norms to put check on smoking.Stocks of Godfrey Phillips slumped 6.09 per cent to Rs 2,990, while ITC was down by 1.85 per cent to Rs 351.05 and VST Industries lost 3.58 per cent to Rs 1,625.05 on the BSE.

Modi’s Effect

Since Modi came to power on May 26,

only ITC has moved up (3.7 per cent) while rival stocks have fallen.

Godfrey Phillips has lost 6.4 per cent,

VST Industries 8.5 per cent and

Golden Tobacco 30 per cent. Modi’s tweet:“On World No Tobacco Day, let'spledge to spread awareness onthe risks of tobaccoconsumption & work to reducetobacco consumption in India.”