|
Quantamental
Equity Research on ITC LTD | Release: 14 Oct 2020 17:05:18 UTC+05:30 |
Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE
CODE:ITC and BSE CODE:500875 |
| Last Close: |
INR 167.7 |
| Fair Value: |
INR 124.05 |
| Est. Price by Mar 21: |
INR 239.65 |
| Market Capitalization (INR
Crs): |
206355.47 |
| Industry: |
Cigarettes-Tobacco Products |
| Rating: |
STRONG BUY |
| Upside: |
43% |
| 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 % |
2% |
5% |
5% |
8% |
|
|
|
|
|
|
|
|
|
|
| EBIT % |
5% |
8% |
7% |
10% |
|
|
|
|
|
|
|
|
|
|
| Earnings % |
22% |
14% |
10% |
12% |
|
|
|
|
|
|
|
|
|
|
| Book Value
% |
10% |
12% |
16% |
15% |
|
|
|
|
|
|
|
|
|
|
| Stock Total
Return % |
-43% |
-15% |
-5% |
4% |
|
|
|
|
|
|
|
|
|
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
0.00 |
|
| (B) FII/FPI |
14.60 |
|
| (C)
DII/Insurance Companies |
42.06 |
|
| (D) Public holding < 2 lakhs of cap. |
9.47 |
|
| (E) Others |
33.87 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 |
Mar-20 |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
Mar-25 E |
| Price |
151 |
206 |
235 |
217 |
219 |
280 |
256 |
297 |
172 |
240 |
212 |
198 |
198 |
210 |
| Return on
Equity |
32% |
33% |
33% |
30% |
22% |
22% |
21% |
21% |
23% |
15% |
13% |
11% |
11% |
11% |
| Price to
Earning |
28.3 |
32.1 |
31.6 |
27.0 |
28.3 |
33.1 |
27.7 |
28.9 |
13.8 |
29.3 |
29.3 |
29.3 |
29.3 |
29.3 |
| EVTI |
6.3 |
7.3 |
7.5 |
6.4 |
6.2 |
7.3 |
6.3 |
6.7 |
3.5 |
6.1 |
5.9 |
5.7 |
5.6 |
5.7 |
| EVTIFM |
28.3 |
32.1 |
31.6 |
27.0 |
28.3 |
33.1 |
27.7 |
28.9 |
13.8 |
29.3 |
29.3 |
29.3 |
29.3 |
29.3 |
| Price to Book
Value |
9.1 |
10.6 |
10.3 |
8.2 |
6.2 |
7.3 |
5.9 |
6.2 |
3.2 |
4.3 |
3.7 |
3.4 |
3.3 |
3.4 |
| 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% |
3% |
2% |
2% |
2% |
6% |
3% |
3% |
3% |
3% |
3% |
| Cash Flow to
Firm |
5% |
5% |
5% |
5% |
4% |
5% |
5% |
4% |
9% |
6% |
6% |
6% |
6% |
6% |
|
| Detailed Estimates |
| Title |
Mar-20 |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
Mar-25 E |
|
| Sales |
49,387.70 |
40,884.11 |
36,115.59 |
33,909.28 |
33,721.26 |
35,407.32 |
|
| EBITDA |
21,760.86 |
15,102.38 |
13,340.92 |
12,525.92 |
12,456.46 |
13,079.28 |
|
| EBIT |
20,115.95 |
13,740.70 |
12,053.48 |
11,308.69 |
11,305.62 |
11,991.20 |
|
| PBT |
20,034.57 |
13,659.32 |
12,053.48 |
11,308.69 |
11,305.62 |
11,991.20 |
|
| NPAT |
15,306.23 |
10,056.22 |
8,873.98 |
8,325.65 |
8,323.39 |
8,828.13 |
|
| Price to
Earning |
13.79 |
29.32 |
29.32 |
29.32 |
29.32 |
29.32 |
|
| Price to Book
Value |
3.23 |
4.34 |
3.70 |
3.37 |
3.27 |
3.36 |
|
| Debt to
Equity |
0.00 |
- |
- |
- |
- |
- |
|
| Return on
Equity |
0.23 |
0.15 |
0.13 |
0.11 |
0.11 |
0.11 |
|
| Enterprise Value to Total Income (EVTI) |
3.53 |
6.12 |
5.88 |
5.70 |
5.63 |
5.68 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
14.10 |
30.76 |
29.76 |
28.85 |
28.36 |
28.33 |
|
| Price or Est.
Share Prices |
171.70 |
239.65 |
211.50 |
198.45 |
198.40 |
210.45 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
Mar-25 E |
|
| PBT |
13,659.32 |
12,053.48 |
11,308.69 |
11,305.62 |
11,991.20 |
|
| Interest |
81.38 |
- |
- |
- |
- |
|
| Depreciation |
1,361.69 |
1,287.43 |
1,217.22 |
1,150.84 |
1,088.08 |
|
| Cash Flow
Before Tax |
15,102.38 |
13,340.92 |
12,525.92 |
12,456.46 |
13,079.28 |
|
| Tax Rate |
25.00 |
25.00 |
25.00 |
25.00 |
25.00 |
|
| Cash Flow
After Tax |
11,326.79 |
10,005.69 |
9,394.44 |
9,342.35 |
9,809.46 |
|
| Terminal Cash
Flow |
- |
137,375.88 |
|
| Total Cash
Flow |
11,326.79 |
10,005.69 |
9,394.44 |
9,342.35 |
147,185.34 |
|
| Present Value of
Cash Flow (Mar-21 E) |
146,816.16 |
|
| Debt (Mar-21 E) |
-5,780.23 |
|
| Value of Equity
(Mar-21 E) |
152,596.39 |
|
| Fair Value Per
Share (Mar-21 E) |
124.05 |
|
|
| Equity |
|
|
|
|
206,355 |
|
| Debt |
|
|
|
|
277 |
|
|
| Beta |
Take from Reuters |
|
|
-0.24 |
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
http://www.market-risk-premia.com/in.html |
7% |
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
http://www.market-risk-premia.com/in.html |
6% |
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
81 |
|
| Tax Benefit |
|
|
|
|
18 |
|
| Interest Net of Tax |
|
|
|
|
63 |
|
| Debt |
|
|
|
|
277 |
|
| Cost of Debt |
|
|
|
|
23% |
|
| Cost of Equity |
|
|
|
|
5% |
|
| Debt Weight |
|
|
|
|
0% |
|
| Equity Weight |
|
|
|
|
100% |
|
| WACC |
|
|
|
|
5% |
|
|
| Cash Flow of Mar-25 E |
|
|
|
|
9,809.46 |
|
| Growth |
|
|
|
|
-2.9% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
137,375.88 |
|
|
| 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 |
170.15 |
209,370 |
277.45 |
11.50 |
7.50 |
11.49 |
-0.24 |
14.13 |
18.44 |
3.21 |
0.77 |
-3.00 |
|
|
| 2 |
VST Industries |
3,296.95 |
5,090 |
- |
27.69 |
7.50 |
27.69 |
1.41 |
16.74 |
47.35 |
6.47 |
0.35 |
883.78 |
|
|
| 3 |
Godfrey Phillips |
875.55 |
4,552 |
355.73 |
13.99 |
15.19 |
13.91 |
- |
14.17 |
12.13 |
2.08 |
1.17 |
-2.18 |
|
|
| 4 |
Golden Tobacco |
21.50 |
38 |
2.00 |
20.00 |
866.00 |
50.26 |
- |
- |
10.19 |
- |
- |
- |
|
|
| 5 |
NTC Industries |
26.00 |
28 |
7.00 |
22.34 |
15.03 |
20.23 |
-0.02 |
6.38 |
16.38 |
0.49 |
0.39 |
0.01 |
|
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