|
Quantamental
Equity Research on ITC LTD | Release: 30 Jan 2019 17:29:17 UTC+05:30 |
Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE
CODE:ITC and BSE CODE:500875 |
| Last Close: |
INR 278.45 |
| Fair Value: |
INR 165.1 |
| Est. Price by Mar 19: |
INR 286.75 |
| Market Capitalization (INR
Crs): |
341015.38 |
| Industry: |
Cigarettes-Tobacco Products |
| Rating: |
NEUTRAL |
| Upside: |
3% |
| Company Profile |
|
|
| ITC is a holding company, which is engaged in the marketing of
fast moving consumer goods (FMGC). The Company operates through four
segments: FMCG; Hotels; Paperboards, Paper and Packaging, and Agri Business. |
| Growth Per Share |
|
|
| Particulars |
1-Year |
3-Year |
5-Year |
|
| Revenue % |
1% |
41% |
82% |
|
| EBIT % |
9% |
20% |
57% |
|
| Earnings % |
10% |
17% |
51% |
|
| Book Value
% |
13% |
68% |
131% |
|
| Stock Total
Return % |
-4% |
18% |
32% |
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
0.00 |
|
| (B) FII/FPI |
17.05 |
|
| (C)
DII/Insurance Companies |
38.10 |
|
| (D) Public holding < 2 lakhs of cap. |
8.39 |
|
| (E) Others |
36.46 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-10 |
Mar-11 |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Price |
89 |
125 |
159 |
204 |
231 |
228 |
219 |
279 |
269 |
287 |
316 |
342 |
366 |
386 |
|
| Return on
Equity |
29% |
31% |
33% |
33% |
34% |
31% |
22% |
22% |
22% |
21% |
21% |
21% |
21% |
20% |
|
| Price to
Earning |
25.5 |
29.5 |
30.6 |
32.8 |
31.5 |
28.6 |
28.3 |
33.3 |
29.2 |
29.2 |
29.2 |
29.2 |
29.2 |
29.2 |
|
| EVTI |
5.2 |
6.4 |
7.0 |
7.7 |
7.8 |
7.0 |
6.5 |
7.6 |
7.1 |
6.8 |
6.8 |
6.8 |
6.8 |
6.8 |
|
| EVTIFM |
25.5 |
29.5 |
30.6 |
32.8 |
31.5 |
28.6 |
28.3 |
33.3 |
29.2 |
29.2 |
29.2 |
29.2 |
29.2 |
29.2 |
|
| Price to Book
Value |
7.4 |
9.3 |
10.1 |
10.9 |
10.6 |
8.9 |
6.3 |
7.5 |
6.4 |
6.2 |
6.3 |
6.2 |
6.0 |
5.9 |
|
| Debt to
Equity |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
| Dividend
Yield |
4% |
2% |
2% |
2% |
2% |
2% |
3% |
2% |
2% |
2% |
2% |
2% |
2% |
2% |
|
| Cash Flow to
Firm |
29% |
5% |
5% |
5% |
5% |
5% |
4% |
5% |
5% |
5% |
5% |
5% |
5% |
5% |
|
|
| Detailed
Estimates |
| Title |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Sales |
40,619.65 |
44,625.70 |
48,484.38 |
52,087.34 |
55,324.87 |
58,091.12 |
|
| EBITDA |
18,106.67 |
19,576.71 |
21,269.46 |
22,850.03 |
24,270.30 |
25,483.81 |
|
| EBIT |
16,961.30 |
18,318.38 |
20,088.03 |
21,740.79 |
23,228.84 |
24,506.00 |
|
| PBT |
16,851.70 |
18,208.78 |
20,088.03 |
21,740.79 |
23,228.84 |
24,506.00 |
|
| NPAT |
11,223.25 |
12,019.62 |
13,260.11 |
14,351.10 |
15,333.36 |
16,176.41 |
|
| Price to
Earning |
29.20 |
29.21 |
29.21 |
29.21 |
29.21 |
29.21 |
|
| Price to Book
Value |
6.38 |
6.23 |
6.26 |
6.19 |
6.05 |
5.85 |
|
| Debt to
Equity |
0.00 |
- |
- |
- |
- |
- |
|
| Return on
Equity |
0.22 |
0.21 |
0.21 |
0.21 |
0.21 |
0.20 |
|
| Enterprise Value to Total Income (EVTI) |
7.05 |
6.80 |
6.85 |
6.83 |
6.80 |
6.76 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
34.77 |
34.48 |
34.40 |
34.08 |
33.75 |
33.39 |
|
| Price or Est.
Share Prices |
268.57 |
286.75 |
316.35 |
342.40 |
365.85 |
386.00 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| PBT |
18,208.78 |
20,088.03 |
21,740.79 |
23,228.84 |
24,506.00 |
|
| Interest |
109.60 |
- |
- |
- |
- |
|
| Depreciation |
1,258.33 |
1,181.44 |
1,109.24 |
1,041.45 |
977.81 |
|
| Cash Flow
Before Tax |
19,576.71 |
21,269.46 |
22,850.03 |
24,270.30 |
25,483.81 |
|
| Tax Rate |
33.99 |
33.99 |
33.99 |
33.99 |
33.99 |
|
| Cash Flow
After Tax |
12,922.59 |
14,039.97 |
15,083.31 |
16,020.82 |
16,821.86 |
|
| Terminal Cash
Flow |
- |
265,022.31 |
|
| Total Cash
Flow |
12,922.59 |
14,039.97 |
15,083.31 |
16,020.82 |
281,844.17 |
|
| Present Value of
Cash Flow |
202,143.53 |
|
| Debt |
- |
|
| Value of Equity |
202,143.53 |
|
| Fair Value Per
Share |
165.10 |
|
|
| Equity |
|
|
|
|
341,015 |
|
| Debt |
|
|
|
|
18 |
|
|
| Beta |
Take from Reuters |
|
|
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
Prevailing Yield in India |
|
|
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
110 |
|
| Tax Benefit |
|
|
|
|
37 |
|
| Interest Net of Tax |
|
|
|
|
73 |
|
| Debt |
|
|
|
|
18 |
|
| Cost of Debt |
|
|
|
|
0% |
|
| Cost of Equity |
|
|
|
|
12% |
|
| Debt Weight |
|
|
|
|
0% |
|
| Equity Weight |
|
|
|
|
100% |
|
| WACC |
|
|
|
|
12% |
|
|
| Cash Flow of Mar-23 E |
|
|
|
|
16,821.86 |
|
| Growth |
|
|
|
|
5.3% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
265,022.31 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
B.V.
Rs. |
Annualized
ROE % |
ROCE
% |
Latest
EVTI |
Latest
EVTIFM |
CMP
/ BV |
P/E |
Debt
/ Eq |
Div
Yld % |
Growth
Rate R % |
SGR
% |
Ann
Total Income |
Unpledged
Prom Hold % |
PQEIOI |
QoQ
Sales % |
Qtr
Sales Var % |
QoQ
Profits % |
Qtr
Profit Var % |
Graham's
Number Rs. |
| 1 |
ITC |
278.45 |
341,015 |
41.97 |
31.32 |
34.21 |
6.53 |
30.84 |
6.63 |
28.62 |
- |
1.84 |
13.78 |
28.94 |
48,256 |
- |
144 |
1.43 |
14.90 |
8.61 |
14.02 |
96.00 |
| 2 |
VST Inds. |
3,219.30 |
4,971 |
377.00 |
47.14 |
49.56 |
3.73 |
24.06 |
8.54 |
22.38 |
- |
2.41 |
16.13 |
67.89 |
1,212 |
32.16 |
110 |
0.95 |
22.61 |
-2.96 |
11.41 |
1,104.63 |
| 3 |
Godfrey Phillips |
933.15 |
4,852 |
342.85 |
20.92 |
12.64 |
1.53 |
17.70 |
2.72 |
22.14 |
0.02 |
0.86 |
15.51 |
31.71 |
2,583 |
72.19 |
89 |
9.56 |
-2.72 |
24.04 |
19.69 |
586.95 |
| 4 |
NTC Inds. |
36.00 |
39 |
42.61 |
11.77 |
13.29 |
1.53 |
-18.27 |
0.84 |
7.57 |
0.46 |
- |
11.77 |
8.38 |
35 |
67.50 |
-114 |
133.76 |
38.49 |
105.88 |
294.44 |
57.26 |
| 5 |
Golden Tobacco |
42.65 |
75 |
-109.54 |
21.86 |
- |
3.41 |
-4.53 |
- |
- |
-0.13 |
- |
21.86 |
38.66 |
23 |
25.86 |
-9 |
-22.10 |
-42.84 |
5.10 |
18.94 |
55.06 |
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