Introduction:

ITC Limited: A Diversified Indian Conglomerate

• Established company: Founded in 1910, ITC has a long history in India 
• Large Indian company: ITC is a major player in the Indian market, with a presence in various sectors 
• Diversified business: It has a strong presence in Fast-Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri-business and IT 
• FMCG leader: Well known for cigarettes, ITC also offers branded packaged foods, personal care products, education and stationery items, and more .
• Hospitality: ITC Hotels manages over 120 properties across multiple brands, catering to different segments 

Understanding the Company:

ITC’s Triple Bottomline Contribution:

1. Gross Revenue ₹69,481cr
2. EBITDA  ₹23,944cr
3. Nearly 75%  of Value-added Accrues to the Exchequer
4. Among Top 3 Corporates in the Private Sector in Terms of Contribution to Exchequer over the Years
5. Net Cash from Operating Activities ₹17,912cr 
6. Total Dividend paid ₹19,255cr 
7. 12 Future-ready Businesses across Agriculture, Manufacturing and Services
8. 25+ World-class Mother Brands
9. 200+ Manufacturing Units
10. 4.5 mn tonnes of Agri Commodities Throughput

ITC’s Businesses:

• FMCG & Cigarettes:
  • Contributes 44.8% of total revenue &  76.6% of total net profit.
• AGRI Business:
  • Contributes 18.13% of total revenue &  5.5% of total net profit.
• ITC Infotech:
  • Contributes 19.71% of total revenue &  9.38% of total net profit.
• Paperboards & Packaging Business:
  • Contributes 12.35% of total revenue &  4.8% of total net profit.
• ITC Hotels:
  • Contributes 5% of total revenue &  3.73% of total net profit.

Brand leaders:

• • Aashirvaad – No. 1 in Branded Atta
  • Sunfeast – No. 1 in the Cream Biscuits segment
  • Bingo – No. 1 in Bridges segment of Snack Foods
  • Classmate-No. 1 in Notebooks
  • Yippee noodles-No. 2 in Noodles
  • Mangaldeep-No. 1 in Dhoop segment No. 2 in Agarbattis

Financial Statement Analysis:

• Market Cap              ₹5,30,289 Cr
• Stock P/E                     25.9
• Book Value               ₹55.4
• Dividend Yield            3.00 %
• ROCE                            39.0 %
• ROE                               29.1 %
• Face Value                ₹1.00
• Promoter holding       0.00 %
• Profit after tax          ₹20,464 Cr
• Debt                            ₹284 Cr.
• EPS                             ₹16.5
• Debt to equity             0.00
• Return on assets        23.8 %
• ROCE                           39.0 %
• Dividend Payout        100 %
• Quick ratio                  1.73

ITC QUARTERLY SALES

ITC BALANCE SHEET

ITC PROFITS

PEER COMPARISON

KEY RATIOS

Qualitative Factors:

• Brand Name Credibility:

  • Solid Brand Name Profile: ITC has a number of reputable brand names like Aashirvaad (atta), Wills (cigarettes), Classmate (notebooks) together with Bingo (snacks). These brand names hold solid settings in their particular markets, cultivating customer depend on plus commitment.
  • Concentrate on Quality: ITC is understood for its dedication to item top quality plus development. This emphasis aids keep brand credibility coupled with costs prices power.

• Monitoring Quality:

  • Experienced Leadership: ITC has a well-experienced administration group with a tested performance history. This experience can be essential for browsing complicated service settings and also making calculated choices.
  • Business Governance: ITC highlights great company administration techniques, advertising openness together with responsibility. This can be appealing to capitalists looking for fairly taken care of firms.

• Market Position:

  • Leading Player in Cigarettes: ITC is the marketplace leader in cigarettes in India which creates substantial cash money circulation for the firm. Nonetheless governing dangers as well as preconception border the cigarette market.
  • Diversification Strategy: While cigarettes are a significant factor ITC has actually branched out right into various other fields like FMCG (leaving out cigarette) Hotels as well as Paperboards & & Packaging. This diversity minimizes dependancy on a solitary sector and also supplies development possibilities.

• Affordable Landscape:

  • FMCG Competition: The FMCG market in India is extremely affordable with gamers like HUL as well as Nestle. ITC requires to keep its brand name difference as well as set you back effectiveness to remain in advance.
  • Regulative Environment: The federal government plays a considerable function in managing ITC’s organizations particularly cigarettes and also agri-business. Modifications in policies can influence earnings.

• Sustainability:

  • Social Responsibility: ITC has a solid concentrate on social obligation campaigns in locations like education and learning females empowerment, together with country growth. This can improve brand name photo as well as bring in socially aware capitalists.
  • Ecological Initiatives: ITC is devoted to ecological durability with water preservation, waste monitoring as well as renewable resource use. This emphasis can reduce future governing threats as well as improve brand name picture.

• Furthermore think about these elements:

  • Research & & Development (R & D): Analyze ITC’s financial investment in R&D for item advancement and also staying in advance of the contour.
  • Distribution  Network: Evaluate the stamina as well as reach of ITC’s Distribution network throughout various fields.

All together of ITC:

• Financials:

  • Solid Solvency: ITC flaunts a reduced debt-to-equity proportion, showing a healthy and balanced economic placement and also capacity to satisfy long-lasting responsibilities.
  • Earnings: Analyze previous efficiency via profits, EBITDA, as well as earnings fads from ITC’s yearly records.
  • Development Potential: Look for ITC’s growth prepares in existing and also brand-new markets.

• Qualitative Factors:

  • Strengths:
    • Brand Name Power: Recognized brand names like Aashirvaad and also Classmate make certain brand name commitment plus costs rates.
    • Monitoring Expertise: Experienced management with a tried and tested performance history influences self-confidence.
    • Diversification: Presence throughout FMCG (omitting cigarette), Hotels and also Paperboards minimizes danger together with uses development chances.
    • Sustainability Focus: Initiatives in social duty along with ecological techniques boost brand name picture plus future-proof business

• • Weak Points:
    • Tobacco Dependence: While a significant capital resource, cigarettes encounter governing threats plus social preconception.
    • Affordable Landscape: Stiff competitors from FMCG titans like HUL plus Nestle needs consistent advancement.
    • Regulative Environment: Government laws in crucial markets like cigarettes as well as agri-business can affect earnings.
  • Opportunities:
    • Expanding FMCG Market: India’s expanding FMCG market provides development possibility for non-tobacco sections.
    • Development right into New Markets: Exploring global markets can expand ITC’s reach and also earnings streams.
    • Focus on Innovation: Continued financial investment in R&D can cause brand-new items along with enhance market setting.
  • Treats:
    • Stricter Regulations: Increasing guidelines on cigarette, product packaging together with ecological methods posture obstacles.
    • Commodity Price Fluctuations: Fluctuations in raw product rates can affect success margins.

Overall Assessment:

• ITC’s solid monetary health and wellness, brand name power, plus diversification technique placement it well for future development. Nonetheless dependence on cigarette, extreme competitors plus regulative dangers call for mindful factor to consider.

Financial Investment Decision:

• This evaluation offers a structure. For a financial investment choice, you would certainly require to carry out more study, consider your threat resistance, along with assess ITC’s efficiency versus its peers.

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