FINANCIAL MODELING

And
BUSINESS VALUATION

On

ITC Ltd.
 INDUSTRY

Company is more than 100 year old, started business by making and selling cigarettes.
Company has been consistently performing well for the past many years.
Company has High ROCE and zero debt, and strong free cash flows.
Company is market leader in cigarette industry with 80% market share. Major part of
company’s revenue comes from cigarettes business.
Company diversified in FMCG and foods segment, with a wide variety of products to offer
company has recently crossed 10,000 crore revenue milestone and targets 100,000 crore
revenue from FMCG segment by 2030.
Company has also acquired two big brands from Johnson and Johnson that is Savlon and
Shower To Shower, by which company wishes to expand in healthcare and hygiene niche.
Company owns largest chain of Hotels in India, and aims to become market leader in the
segment.
Company is expanding its business to multi-speciality hospitals, taking advantage of medical
tourism and affordable health care provided by country.
SECTORS CONTRIBUTION TO GDP

ITC has been listed among India's Most Valuable Companies by Business Today magazine. The
Company is among India's '10 Most Valuable (Company) Brands.

ITC also ranks among Asia's 50 best performing companies.

The contribution of the sector to overall GDP growth has maintained an upward trend TILL 2015
Quarter 1 reflecting that the sector is well infused into the economy in terms of its use of local content
for capacity building.

It is predicted to increase after 2017

quarter 1 to 7, 7.5% in 2018-2019, the
total domestic sales will decline to 6
to 6.5% in 2020.
 IMPACT OF ITC SHARE ON THE MARKET

During the year, the performance of the Company’s share price remained subdued relative to Nifty 50,
reflecting the sharp increase in taxation and regulatory pressures on the cigarette industry.

CURRENT SITUATION

Recognising the tomorrow’s world will belong to those who

create, own and nurture intellectual capital, ITC continues to
invest in augmenting the capability of its globally
benchmarked Life Sciences and Technology Centre to
ensure that its Businesses are future-ready and contribute to building intellectual property
assets for the nation.

ITC’s Board and employees are inspired by the Vision of sustaining ITC’s position as one of
India’s most admired and valuable companies, creating enduring value for all stakeholders,
including the shareholders and the Indian society.

The vision of enlarging ITC’s contribution to the Indian economy is driven by its ‘Let’s Put
India First’ credo anchored on the core values of Trusteeship, Transparency, Empowerment,
Accountability and Ethical Citizenship, which are the cornerstones of ITC’s Corporate
Governance philosophy.
Inspired by this Vision, driven by Values and powered by internal Vitality, the Directors and
employees look forward to the future with confidence and stand committed to creating an
even brighter future for all stakeholders, customers, suppliers and clients.

FORECASTED

The overall expected sales will decline by 2.53% consecutively

As per our interpretation in the upcoming year i.e. 2020 ITC will have increase in Net Profit by 15%
but in 2021 and 2022 the company will face a loss of approx. 8% in Net Profit.

The Forecasted Market Price will be Rupees 264 in 2020 whereas Rupees 268 in 2021 and Rupees
283 in 2022

This shows that the price of ITC will increase.

The increase in share capital after 2020 will be 82.31%

And also as stated in the ratios above the Working Capital ratio
is negative which implies that ITC is significantly degrading the
efficiency level in the utilization of its working capital which
will result in a in a higher manufacturing and administration cost
in the long run.