|
Quantamental
Equity Research on ITC LTD | Release: 20 Jan 2020 17:18:33 UTC+05:30 |
Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE
CODE:ITC and BSE CODE:500875 |
| Last Close: |
INR 240.75 |
| Fair Value: |
INR 188.15 |
| Est. Price by Mar 20: |
INR 303.75 |
| Market Capitalization (INR
Crs): |
295908.85 |
| Industry: |
Cigarettes-Tobacco Products |
| Rating: |
STRONG BUY |
| Upside: |
26% |
| Company Profile |
|
| ITC is one of India's foremost private sector companies with a
market capitalisation of US $ 50 billion and Gross Sales Value of US $ 10
billion. ITC has a diversified presence in FMCG, Hotels, Packaging,
Paperboards & Specialty Papers and Agri-Business.(Source : Company
Web-Site) |
| Compounded Annual Growth |
|
|
|
|
|
|
|
|
|
|
|
| Particulars |
1-Year |
3-Year |
5-Year |
10-Year |
|
|
|
|
|
|
|
|
|
|
| Revenue % |
11% |
7% |
6% |
10% |
|
|
|
|
|
|
|
|
|
|
| EBIT % |
10% |
9% |
8% |
12% |
|
|
|
|
|
|
|
|
|
|
| Earnings % |
12% |
10% |
7% |
12% |
|
|
|
|
|
|
|
|
|
|
| Book Value
% |
13% |
11% |
17% |
15% |
|
|
|
|
|
|
|
|
|
|
| Stock Total
Return % |
17% |
11% |
5% |
14% |
|
|
|
|
|
|
|
|
|
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
0.00 |
|
| (B) FII/FPI |
15.18 |
|
| (C)
DII/Insurance Companies |
42.58 |
|
| (D) Public holding < 2 lakhs of cap. |
8.73 |
|
| (E) Others |
33.51 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-11 |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
| Price |
121 |
151 |
206 |
235 |
217 |
219 |
280 |
256 |
297 |
304 |
325 |
346 |
366 |
386 |
| Return on
Equity |
30% |
32% |
33% |
33% |
30% |
22% |
22% |
21% |
21% |
23% |
22% |
21% |
21% |
20% |
| Price to
Earning |
28.5 |
28.6 |
32.3 |
31.7 |
27.1 |
28.3 |
33.1 |
27.7 |
28.9 |
24.6 |
24.6 |
24.6 |
24.6 |
24.6 |
| EVTI |
6.0 |
6.4 |
7.4 |
7.6 |
6.4 |
6.2 |
7.3 |
6.3 |
6.7 |
6.4 |
6.3 |
6.3 |
6.2 |
6.2 |
| EVTIFM |
28.5 |
28.6 |
32.3 |
31.7 |
27.1 |
28.3 |
33.1 |
27.7 |
28.9 |
24.6 |
24.6 |
24.6 |
24.6 |
24.6 |
| Price to Book
Value |
8.7 |
9.2 |
10.6 |
10.3 |
8.2 |
6.2 |
7.3 |
5.9 |
6.2 |
5.7 |
5.5 |
5.3 |
5.1 |
4.9 |
| 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 |
2% |
2% |
2% |
2% |
2% |
3% |
2% |
2% |
2% |
2% |
2% |
2% |
2% |
2% |
| Cash Flow to
Firm |
5% |
5% |
5% |
5% |
5% |
4% |
5% |
5% |
4% |
6% |
6% |
6% |
6% |
6% |
|
| Detailed Estimates |
| Title |
Mar-19 |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
|
| Sales |
48,352.68 |
51,284.32 |
54,257.42 |
57,258.68 |
60,273.78 |
63,287.47 |
|
| EBITDA |
20,617.83 |
22,215.21 |
23,503.09 |
24,803.17 |
26,109.24 |
27,414.70 |
|
| EBIT |
19,221.22 |
20,733.92 |
22,115.13 |
23,502.66 |
24,890.67 |
26,272.91 |
|
| PBT |
19,149.82 |
20,662.52 |
22,115.13 |
23,502.66 |
24,890.67 |
26,272.91 |
|
| NPAT |
12,592.33 |
15,202.83 |
16,271.61 |
17,292.51 |
18,313.77 |
19,330.77 |
|
| Price to
Earning |
28.94 |
24.55 |
24.55 |
24.55 |
24.55 |
24.55 |
|
| Price to Book
Value |
6.16 |
5.67 |
5.47 |
5.27 |
5.07 |
4.88 |
|
| Debt to
Equity |
0.00 |
- |
- |
- |
- |
- |
|
| Return on
Equity |
0.21 |
0.23 |
0.22 |
0.21 |
0.21 |
0.20 |
|
| Enterprise Value to Total Income (EVTI) |
6.73 |
6.37 |
6.34 |
6.29 |
6.23 |
6.18 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
32.12 |
26.17 |
25.86 |
25.47 |
25.10 |
24.75 |
|
| Price or Est.
Share Prices |
297.25 |
303.75 |
325.15 |
345.60 |
366.05 |
386.40 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
|
| PBT |
20,662.52 |
22,115.13 |
23,502.66 |
24,890.67 |
26,272.91 |
|
| Interest |
71.40 |
- |
- |
- |
- |
|
| Depreciation |
1,481.29 |
1,387.96 |
1,300.51 |
1,218.57 |
1,141.80 |
|
| Cash Flow
Before Tax |
22,215.21 |
23,503.09 |
24,803.17 |
26,109.24 |
27,414.70 |
|
| Tax Rate |
25.00 |
25.00 |
25.00 |
25.00 |
25.00 |
|
| Cash Flow
After Tax |
16,661.41 |
17,627.32 |
18,602.38 |
19,581.93 |
20,561.03 |
|
| Terminal Cash
Flow |
- |
2,65,923.28 |
|
| Total Cash
Flow |
16,661.41 |
17,627.32 |
18,602.38 |
19,581.93 |
2,86,484.31 |
|
| Present Value of
Cash Flow (Mar-20 E) |
2,23,715.35 |
|
| Debt (Mar-20 E) |
-7,520.96 |
|
| Value of Equity
(Mar-20 E) |
2,31,236.31 |
|
| Fair Value Per
Share (Mar-20 E) |
188.15 |
|
|
| Equity |
|
|
|
|
2,95,909 |
|
| Debt |
|
|
|
|
13 |
|
|
| Beta |
Take from Reuters |
|
|
0.69 |
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
Prevailing Yield in India |
|
|
7% |
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
7% |
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
71 |
|
| Tax Benefit |
|
|
|
|
24 |
|
| Interest Net of Tax |
|
|
|
|
48 |
|
| Debt |
|
|
|
|
13 |
|
| Cost of Debt |
|
|
|
|
0% |
|
| Cost of Equity |
|
|
|
|
12% |
|
| Debt Weight |
|
|
|
|
0% |
|
| Equity Weight |
|
|
|
|
100% |
|
| WACC |
|
|
|
|
12% |
|
|
| Cash Flow of Mar-24 E |
|
|
|
|
20,561.03 |
|
| Growth |
|
|
|
|
4.2% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
2,65,923.28 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
Debt
Rs.Cr. |
Cost
of Equity % |
Kd
before tax % |
WACC
% |
Beta |
P/E |
Ann.
ROE % |
CMP
/ BV |
PE/ROE |
PE/ROE/G |
|
|
| 1 |
ITC |
240.75 |
2,95,909 |
9.48 |
18.98 |
7.50 |
18.98 |
0.69 |
21.00 |
35.98 |
5.06 |
0.58 |
1.57 |
|
|
| 2 |
Godfrey Phillips |
1,398.30 |
7,266 |
48.64 |
26.75 |
42.00 |
26.75 |
1.41 |
20.06 |
26.54 |
3.31 |
0.76 |
1.34 |
|
|
| 3 |
VST Inds. |
4,323.20 |
6,675 |
- |
25.51 |
7.50 |
25.51 |
1.39 |
25.63 |
61.45 |
10.46 |
0.42 |
1.24 |
|
|
| 4 |
Golden Tobacco |
27.55 |
48 |
10.30 |
69.48 |
260.19 |
103.08 |
1.63 |
2.18 |
27.53 |
- |
0.08 |
3.55 |
|
|
| 5 |
NTC Inds. |
30.05 |
32 |
14.19 |
20.89 |
10.34 |
16.96 |
-0.25 |
6.01 |
8.85 |
0.59 |
0.68 |
-1.46 |
|
|
| 6 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
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