ITC stocks and financials
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ITC has experienced remarkable growth over the past 10 years, with its share price increasing from Rs. 34.71 in 2004 to Rs. 309.10 in 2013. The company has a strong financial position, with total assets of Rs. 22,354.25 crore and net worth of Rs. 22,287.85 crore as of March 2013. ITC has a diversified business portfolio spanning tobacco, hotels, paper, agriculture, and FMCG. It has a dominant position in the Indian tobacco market, with an 80% share, and is the largest company by market capitalization in the FMCG sector. The document provides an analysis of ITC's financials and business segments.
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ITC stocks and financials
- 1. Since 1910 Recommendation – Strong Buy A project by Santosh Lal
- 2. ITC has come a long way in last 10 years. The prices have rose significantly and picked up a steady pace. ITC’s growth has been remarkable in these years. Starting from just a closing price of Rs.34.71 / share in 2004, it reached Rs. 309.10 / share in the year 2013. Graphically presenting, the data clearly shows that the company has a bullish trait Share Price 347.20 Total Market Capital Rs. 2,747 48 cr. ( $ 45.79 billion) Shares Issued 7913252114 P/E Ratio 36.97 52 weeks high 380.00 52 Weeks low 281.15
- 3. Net sales and Net Profit chart of ITC (since 2008) year high low Closing (as on march 31st ) 2004 39.51 20.63 34.71 2005 47.23 24.40 44.79 2006 100.00 44.07 97.48 2007 106.35 70.08 75.20 2008 119.70 73.08 103.18 2009 116.20 66.03 92.40 2010 136.35 88.80 131.58 2011 184.70 126.93 181.45 2012 227.75 177.80 226.85 2013 310.75 223.30 309.10
- 4. Balance sheet of ITC Ltd. Particulars Mar'13 Mar'12 Liabilities 12 Months 12 Months Share Capital 790.18 781.84 Reserves & Surplus 21497.67 17957.00 Net Worth 22287.85 18791.89 Secured Loan .00 1.77 Unsecured Loan 66.40 77.32 TOTAL LIABILITIES 22354.25 18870.98 Gross Block 16679.17 13926.34 (-) Acc. Depreciation 5469.83 4819.66 Net Block 11209.34 9053.63 Capital Work in Progress 1487.79 2572.06 Investments 7060.29 6316.59 Inventories 6600.20 5637.83 Sundry Debtors 1163.34 986.02 Cash and Bank 3615.00 2818.93 Loans and Advances 2881.47 1952.54 Total Current Assets 14260.01 11395.32 Current Liabilities 6404.43 6108.60 Provisions 5258.75 4411.07 Total Current Liabilities 11663.18 10519.67 NET CURRENT ASSETS 2596.83 875.65 Misc. Expenses .00 .00 TOTAL ASSETS 22354.25 18870.98 ( In Rs. Cr)
- 5. Comparative balance sheet Particulars Amt (2013) Amt. (2012 Change % Net worth 22287.85 18791.89 119 Total Liability 22354.25 18870.98 118 Net Block 11209.34 9053.63 123 Current assets 14260.01 11395.32 125 Current liability 11663.18 10519.67 111 Total Assets 22354.25 18870.98 118 DuPont Analysis Particulars HUL ITC Net profit 3,796.67 7,418.39 Net sales 25,810.21 29,901.27 Net assets 2,674.02 22354.25 Net equity 216.25 790.18 PAT/ Equity (ROE) = PAT/Net sales X Net sales/ Net assets X net assets/ total equity For HUL = 3797 /25810x 25810/2674x 2674 /216 = 0 .15 x 9.65 x 12.38 = 18 For ITC = 7418/29901 x 29901/22354 x22354/790 = 0.25 x 1.34 x 28.30 = 9.48 Analysis : All ratios of ITC are greater than HUL but net sales / net assets is muchlower so ITC needsto increase both its sales and assets
- 6. SHARE HOLDING PATTERN OF ITC 1. Institution 2. Non- institution CATEGORY OF SHAREHOLDER NO. OF SHAREHOLDERS TOTAL NO OF SHARES TOTAL SHARES IN DEMATERIALISED FORM BODIES CORPORATE 4,094 369,492,872 368,368,022 INDIVIDUALS INDIVIDUAL SHAREHOLDERS HOLDING NOMINAL SHARE CAPITAL UPTO RS 1 LAC 450,604 686,042,457 555,990,828 INDIVIDUAL SHAREHOLDERS HOLDING NOMINAL SHARE CAPITAL IN EXCESS OF RS 1 LAC 688 137,936,153 120,641,873 QUALIFIED FOREIGN INVESTORS 1 100 100 FOREIGNCORPORATE BODIES 6 2,413,229,356 153,256 FOREIGNNATIONALS 12 533,023 88,783 TRUSTS 68 9,089,096 9,089,096 CATEGORY OF SHAREHOLDER NO. OF SHAREHOLDERS TOTAL NO OF SHARES TOTAL SHARES IN DEMATERIALISED FORM MUTUAL FUNDS/UTI 329 1,059,175,356 1,058,644,506 FINANCIAL INSTITUTIONS / BANKS 5,656,383 5,100,633 INSURANCECOMPANIES 62 1,659,923,091 1,659,859,611 FOREIGNINSTITUTIONAL INVESTORS (FII) 990 1,527,719,802 1,527,719,802 SUB TOTAL 1505 4,252,748,502 4,251,324,552
- 7. CLEARING MEMBERS 379 2,579,324 2,579,324 NON RESIDENTINDIANS (NRI) 8,502 41,601,231 30,942,366 OTHERS 8,967 2,467,032,030 42,852,825 SUB - TOTAL 464,354 3,660,503,612 1,087,853,648 ------------------------------------------------------------------------------------------------- CURRENT SHARE PRICE CURRENT PRICE: RS. 347.20 (as of 17.3.14 at NSE) and Rs. 347.00 (as of 17.3.14 AT BSE) BSE: 52 WEEKS LOW: RS. 281.15 52 WEEKS HIGH: RS. 380.00 NSE: 52 WEEKS LOW: Rs. 281.15 52 WEEKS HIGH: Rs. 380.00 -----------------------------------------------------------------------------------------------------------------------------
- 8. TOTAL MARKET CAPITAL $. 45.79 billion (7913252114 X Rs.347.20*) * As of 16.3.2014 the rate of ITC’s share being Rs. 347.20 per share at NSE EARNING PER SHARE (EPS) EPS: 9.39 (Profit Before Taxes: Rs. 10,684.18 cr. ) PRICE EARNING RATIO 36.97 ITC’s PRICE EARNING RATIO AND THE COMPETITORS IN THAT SEGMENT:- DIVIDEND HISTORY The company has a good dividend track report and has consistently declared dividends for the last 5 years. For the year end March 2013, ITChas declared an equity dividend of 525.00% amounting to Rs 5.25 per share. At the currentshareprice of Rs 347.20 this resultin a dividend yield of 1.51%.
- 9. Date Div announced Dividend (%) Remarks 17-05-13 525.00 Rs.5.2500 per share 25-05-12 450.00 Recommended a Special Dividend of Rs. 1.65 per Ordinary Share of Re. 1/- each and a Dividend of Rs. 2.80 per Ordinary Share of Re.1/- each. 20-05-11 445.00 Special Centenary dividend of Re. 5.50 per Ordinary Share of Re 1/- each and a dividend of Re. 4.50 per Ordinary Share for the financial year ended March 31, 2010. 21-05-10 1,000.00 -------------------- 22-05-09 370.00 -------------------- 23-05-08 350.00 --------------------
- 10. About ITC ITC Ltd is one of India’sforemost Pvt. Sector companies. It is highly diversified and has a large presence in all over India. Undisputed leader in IndianTobacco Market with 80% of market share Rated among world’s most reputable companies by Forbes magazine Rated among world’s best big companies and Asia’s Fab 50 by Business Week magazine. Highest market capitalizationamong all the FMCG companies in India. Industries ITC is involved in: Tobacco Hotels Paperboardsand specialty papers Packaging Agri- Business Packaged food and confectionary Information Technology Branded Apparel Personal care Stationary Safety Matches Other FMCG products
- 11. ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Ltd. As the company'sownership progressively Indianised,the name of the company was changed from Imperial Tobacco Company of India Ltd to India Tobacco Company Ltd in the year 1970 and then to I.T.C. Ltd in the year 1974. In recognition of the company's multi-businessportfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology,Packaging, Paperboards& Specialty Papers, Agri-business, Foods, Lifestyle Retailing,Education& Stationery and Personal Care - the full stops in the company's name were removed effective September 18, 2001. The company now stands rechristened ITC Ltd. It is to be noted that ITC’s overall sales of cigarettes has a share of 64% followed by its FMCG sales at 16%. Agri and paper businesses make up 10% and 7% of overall revenues whereas hotel business is the smallest segment with a 3% sales share.
- 12. FMCG AND CIGARETTE INDUSTRY IN INDIA FMCG: The Indian FMCG sector is the fourth largest in the Indian economy and has a market sizeof $13.1 billion. This industry primarily includes the production, distribution and marketing of consumer packaged goods, that is thosecategories of products which are consumed at regular intervals. The sector is growing at rapid pace with well-established distribution networks and intense competition between the organized and unorganized segments. Ithas a strong and competitive MNC presenceacross the entire value chain. The FMCG’s promising market includes middle class and the ruralsegments of the Indian population, and give brand makers the opportunity to convertthem to branded products. Itincludes food and beverage, personal care, pharmaceuticals, plastic goods, paper and stationery and household products etc. Due to high inflation, muted salary hikes and slowing economy growth urban consumers spent less in the calendar year 2012. The overall slowdown in the economy has begun to affect the FMCG sector with companies posting deceleration in volumegrowth in the recent quarterly results. But it is predicted that growth will come fromruraldwellers that are expected to see a risein disposableincomes due to the direct cash transfer scheme, while urban consumers willcontinue to be affected by the macroeconomic environment. Company Market capitalization ITC 256,769 cr. HUL 127,144 cr. Nestle India 49,768 cr. Godrej consumer products ltd. 28,107 cr. Dabur India ltd. 27,261 cr. GlaxoSmithKline consumer healthcare 23,435 cr. Colgate Palmolive 18,329 cr. Marico ltd. 13,137 cr. Emami 10,788 cr. Procter & Gamble 9,555 cr.
- 13. Tobacco: India is the second largest producer of tobacco in the world and one of the leading tobacco exporting countries in t he world. Tobacco occupies a prime place in the Indian economy on account of its considerablecontribution to the agricultural, industrial and export sectors. Although the Indian cigarette marketdecreased by 1% through 2012, still the country saw a huge volume sales of 102.1 billion sticks. Thedecrease was mainly due to the increased excise tax by central Govt. and high VAT by the state Govt. Over the next five years, retail volume sales of cigarettes in India are expected to decline marginally, while constantvalue growth is expected to increase by 3% by 2017. The major players in cigarette market in India are ITCLtd., Godfrey Philips India Ltd and VST Industries. ITC is theundisputed leader in the industry which holds the largestmarket share. 80% 11% 8% 1% Retail volume share ITC Ltd. Godfrey Philips India Ltd. VST Industries Others
- 14. Indian economy India is a G-20 major economies and ranks 3rd as per PPP and 10th as per nominal GDP. India’s GDP touched a all time high of 9.3% in 2010 – 11. For the fiscal year 2012 -13 the GDP was 5% and the analysts predict it is set to grow again in near future. The inflation rate according to CPI is 8.79% and WPI is 5.05%. India’s economy was based on mixed economy combining both socialism and capitalism features but in 1991 it adopted liberal and free market principles and liberalized the economy to international trade. Following this reforms and a strong focus on development the country economy grew with a rapid pace. Post independence India was highly dependent on aids from few countries, but slowly after new reform over a period of time it became less dependent on aids and especially after the 1991 reforms, India witnessed a high growth and came out as a major global player. India now stands as the 19th largest exporter in the world. Agriculture is the main driving force behind Indian economy. Once deficient in food production, India today is one of the largest producers of crops and now is a crop surplus nation. The declining poverty rate, overall infrastructural development and growing capital market is a proof of India’s growth as a major economy. India has earned a high reputation in the Information Technology sector. The share of the Indian IT industry in the country's GDP increased from 4.8% in 2005–06 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. Similarly Indian automobile industry is witnessing a rapid growth. Many Indian companies manufacture automobiles indigenously. Companies like TATA, Mahindra & Mahindra and Bajaj has put India in the global stage in automobile industry. As the third-largest economy in the world in PPP terms, India is a preferred destination for FDI during the year 2011, FDI inflow into India stood at $36.5 billion, 51.1% higher than 2010 figure of $24.15 billion
- 15. The main sectors in Indian economy are: Agriculture Industry Textile Services (includes IT enabled services) Retail Mining Tourism Energy and Power Banking and Finance. -------------------------------------------------------------------------------------------------------------- Analysis ITC is one of the most stable stock in the market it h as shown a greater return in 5 years. It has reached the level of 300 from the level 40 in 2008-09. It has shown return of more than 700% in five years. Suppose if someone has bought 1000 shares of ITC in Jan 2009 at the level of 40m and holds the stock for 6 years and now wants to sell the stock in 2014, he makes a profit of more than 260 per share. Overall profit of 2,60,000. He invested only 26000 in 2009 and after 5 years gets back more than 3 lacs’. ITC has shown a steady growth in 5 years. 2010-11 was the most important phase in the company history where it traded from the level of 60 – 180. Giving about 200% return in a year. Since then the stock has made new high every year. It has not shown any kind of gradual decrease within five years. Technically it is bullish and has the capability to show same kind of growth in coming five years.