BSE:500875

Stock Analysis Report

Executive Summary

ITC Limited engages in the fast moving consumer goods, hotels, paperboards, paper and packaging, agri, and information technology businesses worldwide.


Snowflake Analysis

Outstanding track record with flawless balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has ITC's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 500875's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-7.2%

500875

-6.9%

IN Tobacco

-2.9%

IN Market


1 Year Return

-45.1%

500875

-40.8%

IN Tobacco

-29.3%

IN Market

Return vs Industry: 500875 underperformed the Indian Tobacco industry which returned -40.8% over the past year.

Return vs Market: 500875 underperformed the Indian Market which returned -29.3% over the past year.


Shareholder returns

500875IndustryMarket
7 Day-7.2%-6.9%-2.9%
30 Day-17.6%-11.7%-23.7%
90 Day-31.6%-24.0%-28.6%
1 Year-44.0%-45.1%-38.5%-40.8%-27.9%-29.3%
3 Year-38.8%-41.9%-37.0%-43.2%-15.4%-20.0%
5 Year-19.0%-26.5%-26.3%-37.7%-3.3%-8.3%

Price Volatility Vs. Market

How volatile is ITC's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is ITC undervalued compared to its fair value and its price relative to the market?

13.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 500875 (₹162.9) is trading above our estimate of fair value (₹157.6)

Significantly Below Fair Value: 500875 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 500875 is good value based on its PE Ratio (13.4x) compared to the Tobacco industry average (13.4x).

PE vs Market: 500875 is poor value based on its PE Ratio (13.4x) compared to the Indian market (9.2x).


Price to Earnings Growth Ratio

PEG Ratio: 500875 is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: 500875 is overvalued based on its PB Ratio (3.4x) compared to the IN Tobacco industry average (2.2x).


Next Steps

Future Growth

How is ITC forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 500875's forecast earnings growth (8.6% per year) is above the savings rate (6.5%).

Earnings vs Market: 500875's earnings (8.6% per year) are forecast to grow slower than the Indian market (19.6% per year).

High Growth Earnings: 500875's earnings are forecast to grow, but not significantly.

Revenue vs Market: 500875's revenue (9% per year) is forecast to grow faster than the Indian market (9% per year).

High Growth Revenue: 500875's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 500875's Return on Equity is forecast to be high in 3 years time (25.2%)


Next Steps

Past Performance

How has ITC performed over the past 5 years?

9.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 500875 has high quality earnings.

Growing Profit Margin: 500875's current net profit margins (29.7%) are higher than last year (26%).


Past Earnings Growth Analysis

Earnings Trend: 500875's earnings have grown by 9.3% per year over the past 5 years.

Accelerating Growth: 500875's earnings growth over the past year (22.2%) exceeds its 5-year average (9.3% per year).

Earnings vs Industry: 500875 earnings growth over the past year (22.2%) exceeded the Tobacco industry -1.9%.


Return on Equity

High ROE: 500875's Return on Equity (25.9%) is considered high.


Next Steps

Financial Health

How is ITC's financial position?


Financial Position Analysis

Short Term Liabilities: 500875's short term assets (₹331.5B) exceed its short term liabilities (₹102.1B).

Long Term Liabilities: 500875's short term assets (₹331.5B) exceed its long term liabilities (₹25.2B).


Debt to Equity History and Analysis

Debt Level: 500875's debt to equity ratio (0.02%) is considered satisfactory.

Reducing Debt: 500875's debt to equity ratio has reduced from 0.9% to 0.02% over the past 5 years.

Debt Coverage: 500875's debt is well covered by operating cash flow (126650.1%).

Interest Coverage: 500875 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 500875 has a high level of physical assets or inventory.

Debt Coverage by Assets: 500875's debt is covered by short term assets (assets are 3496.3x debt).


Next Steps

Dividend

What is ITC's current dividend yield, its reliability and sustainability?

3.52%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 500875's dividend (3.52%) is higher than the bottom 25% of dividend payers in the Indian market (0.95%).

High Dividend: 500875's dividend (3.52%) is low compared to the top 25% of dividend payers in the Indian market (4.18%).


Stability and Growth of Payments

Stable Dividend: 500875's dividends per share have been stable in the past 10 years.

Growing Dividend: 500875's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.1%), 500875's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 500875's dividends in 3 years are forecast to be covered by earnings (66.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average board tenure


CEO

Sanjiv Puri (56yo)

3s

Tenure

₹61,600,000

Compensation

Mr. Sanjiv Puri has been Managing Director of ITC Limited since May 16, 2018 and also has been its Director since December 6, 2015 and its Chairman since May 13, 2019. Mr. Puri served as Chief Executive Of ...


CEO Compensation Analysis

Compensation vs Market: Sanjiv's total compensation ($USD817.27K) is about average for companies of similar size in the Indian market ($USD934.17K).

Compensation vs Earnings: Sanjiv's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Sanjiv Puri
Chairman & MD3yrs₹61.60m0.00051% 10.2m
Rajiv Tandon
CFO & Executive Director4.17yrs₹32.02m0.0012% 24.7m
Sumant Bhargavan
Executive Director & President of FMCG Businesses1.33yrs₹4.53m0.0036% 72.4m
Nakul Anand
Executive Director9.17yrs₹36.26m0.00081% 16.2m
Sunil Mathur
Independent Non-Executive Director14.67yrs₹7.25m0.0014% 27.9m
Arun Duggal
Independent Non-Executive Director5.5yrs₹7.25mno data
Anand Nayak
Additional Independent Director0.67yrno data0.0076% 151.7m
Shilabhadra Banerjee
Independent Non-Executive Director5.67yrs₹7.15m0.00082% 16.4m
Meera Shankar
Independent Non-Executive Director7.5yrs₹7.30m0.00037% 7.4m
Nirupama Rao
Independent Non-Executive Director3.92yrs₹6.75mno data

4.8yrs

Average Tenure

68yo

Average Age

Experienced Board: 500875's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 500875 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

ITC Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ITC Limited
  • Ticker: 500875
  • Exchange: BSE
  • Founded: 1910
  • Industry: Tobacco
  • Sector: Food, Beverage & Tobacco
  • Market Cap: ₹2.006t
  • Shares outstanding: 12.29b
  • Website: https://www.itcportal.com

Number of Employees


Location

  • ITC Limited
  • Virginia House
  • 37 Jawaharlal Nehru Road
  • Kolkata
  • West Bengal
  • 700071
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ITCBDL (Bourse de Luxembourg)GDR EACH REP 1 ORD INR1 REG SLUUSDNov 1993
500875BSE (Mumbai Stock Exchange)YesOrdinary SharesININRAug 1995
ITCNSEI (National Stock Exchange of India)YesOrdinary SharesININRAug 1995

Biography

ITC Limited engages in the fast moving consumer goods, hotels, paperboards, paper and packaging, agri, and information technology businesses worldwide. The company primarily offers cigarettes and cigars; staples, spices, biscuits, confectionery and gums, snacks, noodles and pasta, beverages, dairy, ready to eat meals, chocolate, coffee, and frozen foods; personal care products; education and stationery products; safety matches; and incense sticks under various brands. It also retails formals and casual wear products, and other lifestyle products through the Wills Lifestyle stores. In addition, the company offers paper boards and specialty paper products; and packaging products, such as carton board, flexible, and tobacco packaging products, as well as operates approximately 100 hotels under the ITC Hotel, WelcomHotel, Fortune, and WelcomHeritage brands. Further, it exports feed ingredients, food grains, marine products, processed fruits, coffee products, leaf tobacco products, and spices; and offers IT services and solutions. Additionally, the company offers technology services and solutions for the consumer packaged goods, retail, manufacturing, hi-tech, banking, financial services and insurance, healthcare, airline, and hospitality industries. The company also provides property infrastructure and real estate maintenance, business consulting, real estate development, and agro-forestry and other related services; manages and operates golf courses; fabricates and assembles machinery for tube filling, cartoning, wrapping, conveyor solutions, and engineering services; and produces and commercializes seed potato technology products. ITC Limited was incorporated in 1910 and is based in Kolkata, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 12:37
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.