ITC (NSEI:ITC) - Share price, News & Analysis

Q: What is the Fair Price of ITC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

ITC (₹308.55) is trading above our estimate of [[fair value]] (₹238.84)

ITC fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	5/6
Financial Health	5/6
Dividends	5/6

ITC Stock Overview

ITC Limited engages in the fast-moving consumer goods, hotels, paperboards and paper, packaging, agri, and information technology (IT) businesses in India and internationally.

Rewards

Earnings are forecast to grow 9.87% per year

Earnings grew by 17.4% over the past year

Risk Analysis

Dividend of 3.73% is not well covered by earnings

ITC Competitors

Godfrey Phillips India

BSE:500163

₹61.6b

VST Industries

BSE:509966

₹51.4b

Nestlé India

BSE:500790

₹1.9t

Britannia Industries

NSEI:BRITANNIA

₹881.5b

Price History & Performance

Summary of all time highs, changes and price drops for ITC
Historical stock prices
Current Share Price	₹308.55
52 Week High	₹316.65
52 Week Low	₹204.35
Beta	0.46
1 Month Change	4.93%
3 Month Change	19.32%
1 Year Change	45.92%
3 Year Change	21.96%
5 Year Change	9.47%
Change since IPO	5,126.80%

Recent News & Updates

Jul 31

Many Would Be Envious Of ITC's (NSE:ITC) Excellent Returns On Capital

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a...

Shareholder Returns

	ITC	IN Tobacco	IN Market
7D	-0.7%	-0.4%	1.1%
1Y	45.9%	-5.5%	8.5%

Return vs Industry: ITC exceeded the Indian Tobacco industry which returned -5.5% over the past year.

Return vs Market: ITC exceeded the Indian Market which returned 8.5% over the past year.

Price Volatility

Is ITC's price volatile compared to industry and market?
ITC volatility
ITC Average Weekly Movement	3.0%
Tobacco Industry Average Movement	4.3%
Market Average Movement	6.4%
10% most volatile stocks in IN Market	9.1%
10% least volatile stocks in IN Market	4.2%

Stable Share Price: ITC is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: ITC's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1910	23,829	Sanjiv Puri	https://www.itcportal.com

ITC Limited engages in the fast-moving consumer goods, hotels, paperboards and paper, packaging, agri, and information technology (IT) businesses in India and internationally. It 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; notebooks, pens and pencils, geometry boxes, erasers, sharpeners, rulers, wax and plastic crayons, sketch pens, and oil pastels; apparel, safety matches; and incense sticks under various brands. The company also operates approximately 113 hotels under the ITC Hotel, WelcomHotel, Fortune, and WelcomHeritage brands; and Kaya Kalp spas.

ITC Fundamentals Summary

How do ITC's earnings and revenue compare to its market cap?
ITC fundamental statistics
Market Cap	₹3.82t
Earnings (TTM)	₹163.56b
Revenue (TTM)	₹659.10b

23.4x

P/E Ratio

5.8x

P/S Ratio

Is ITC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ITC income statement (TTM)
Revenue	₹659.10b
Cost of Revenue	₹297.92b
Gross Profit	₹361.18b
Other Expenses	₹197.62b
Earnings	₹163.56b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	13.21
Gross Margin	54.80%
Net Profit Margin	24.82%
Debt/Equity Ratio	0.4%

How did ITC perform over the long term?

See historical performance and comparison

Dividends

3.7%

Current Dividend Yield

87%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ITC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for ITC. This is calculated by dividing ITC's market cap by their current preferred multiple.
What is ITC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹3.82t

ITC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.5x
Enterprise Value/EBITDA	16.5x
PEG Ratio	2.4x

Price to Earnings Ratio vs Peers

How does ITC's PE Ratio compare to its peers?

ITC PE Ratio vs Peers

The above table shows the PE ratio for ITC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	44.3x
500163 Godfrey Phillips India	13.2x	n/a	₹61.6b
509966 VST Industries	15.2x	n/a	₹51.4b
500790 Nestlé India	89.1x	n/a	₹1.9t
BRITANNIA Britannia Industries	59.9x	16.7%	₹881.5b
ITC ITC	23.4x	9.9%	₹3.8t

Price-To-Earnings vs Peers: ITC is good value based on its Price-To-Earnings Ratio (23.4x) compared to the peer average (44.3x).

Price to Earnings Ratio vs Industry

How does ITC's PE Ratio compare vs other companies in the Asian Tobacco Industry?

Price-To-Earnings vs Industry: ITC is expensive based on its Price-To-Earnings Ratio (23.4x) compared to the Asian Tobacco industry average (12.1x)

Price to Earnings Ratio vs Fair Ratio

What is ITC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ITC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	23.4x
Fair PE Ratio	31.9x

Price-To-Earnings vs Fair Ratio: ITC is good value based on its Price-To-Earnings Ratio (23.4x) compared to the estimated Fair Price-To-Earnings Ratio (31.9x).

Share Price vs Fair Value

What is the Fair Price of ITC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ITC (₹308.55) is trading above our estimate of fair value (₹238.84)

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

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is ITC forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ITC's forecast earnings growth (9.9% per year) is above the savings rate (6.8%).

Earnings vs Market: ITC's earnings (9.9% per year) are forecast to grow slower than the Indian market (18.7% per year).

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

Revenue vs Market: ITC's revenue (6.9% per year) is forecast to grow slower than the Indian market (10.6% per year).

High Growth Revenue: ITC's revenue (6.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ITC's Return on Equity is forecast to be high in 3 years time (31%)

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Past Performance

How has ITC performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

5.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ITC has high quality earnings.

Growing Profit Margin: ITC's current net profit margins (24.8%) are lower than last year (26.4%).

Past Earnings Growth Analysis

Earnings Trend: ITC's earnings have grown by 5.3% per year over the past 5 years.

Accelerating Growth: ITC's earnings growth over the past year (17.4%) exceeds its 5-year average (5.3% per year).

Earnings vs Industry: ITC earnings growth over the past year (17.4%) exceeded the Tobacco industry 10.3%.

Return on Equity

High ROE: ITC's Return on Equity (26.5%) is considered high.

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Financial Health

How is ITC's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ITC's short term assets (₹342.3B) exceed its short term liabilities (₹121.6B).

Long Term Liabilities: ITC's short term assets (₹342.3B) exceed its long term liabilities (₹22.7B).

Debt to Equity History and Analysis

Debt Level: ITC has more cash than its total debt.

Reducing Debt: ITC's debt to equity ratio has increased from 0.09% to 0.4% over the past 5 years.

Debt Coverage: ITC's debt is well covered by operating cash flow (6316.8%).

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

Balance Sheet

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Dividend

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

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.73%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ITC's dividend (3.73%) is higher than the bottom 25% of dividend payers in the Indian market (0.39%).

High Dividend: ITC's dividend (3.73%) is in the top 25% of dividend payers in the Indian market (1.72%)

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (86.6%), ITC's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (104.4%), ITC's dividend payments are not well covered by cash flows.

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Management

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

5.5yrs

Average management tenure

CEO

Sanjiv Puri (59 yo)