RESEARCH REPORT ITC LIMITED. BCG.

With a market capitalization of US $ 45 billion and a sales of

US BUY
$ 7 billion, ITC is one of India's leading private sector firms.
ITC has a diverse position in FMCG, Hotels, Paperboards &
9th AUGUST 2021
Specialty Papers, Packaging, Agri-Business, and Information
RESULT
Technology. Even in its young sectors of Packaged Foods & Sector view: Attractive
Confectionery and Branded Apparel, it is quickly acquiring CMP (`): 213.75
market share. Fair Value (`): 275
BSE-30: 52,976

Cigarette sales and EBIT were higher than expected and less affected by the lockout, showing stronger
execution and share gains compared to rivals.

Recovery patterns are quicker than previous year, which may provide some benefits.

FMCG margins have benefited from increased scale, strict cost control, closer to market manufacturing
units, and growing direct coverage, and this trend is likely to continue.

Hotel industry recovery is expected to be delayed owing to the second wave, although traction in leisure
areas bodes well for the company. The agribusiness prognosis is positive in the short term, since the
supply chain has been rebuilt and the rebound in leaf tobacco exports has improved the sales mix.
`
Financial Snapshot (Stand Alone)

Quarterly Jun-21 Mar-21 Dec-20 Sep-20 Jun-20

Sales 12,959 13,294 12,580 11,976 8,911
Other Income 428 771 970 609 896
Total Income 13,388 14,066 13,551 12,586 9,808
Total 9,362 9,209 8,689 8,298 6,662
Expenditure
EBIT 4,025 4,857 4,861 4,288 3,145
Interest 10 3 13 13 16
Tax 1,001 1,105 1,184 1,041 785
Net Profit 3,013 3,748 3,662 3,232 2,342

Share Holding Pattern

Institutional Holder Analysis Total Number Change Total Holding Change
(%)
MF Schemes (Jun 2021) 320 -28 9.4 0.26
FII/FPI (Jun 2021) 816 -7 11.74 -1.05
Shareholding Pattern - Top Holders
 Mutual Funds have increased
Shareholding Pattern holdings from 9.14% to 9.4% in
Jun 2021 qtr.
 Number of MF schemes
decreased from 348 to 320 in
Jun 2021 qtr
 FII/FPI have decreased
holdings from 12.79% to
11.74% in Jun 2021 qtr
 Number of FII/FPI investors
decreased from 1535 to 1491 in
FFI DDI Public Others Jun 2021 qtr

Relative Price Chart

Insights
- Bullish Momentum - Above the Short-, Medium and Long-Term Moving Averages.

- The price is 30.88 percent higher than the 52-week low.

- 10.62 percent lower than the 52-week high.

- Outperformer - ITC is up 6.18 percent vs. NIFTY 50, which is up 3.62 percent in the
previous month.

Lower shutdown impact and quicker recovery patterns in smokes are both positives that
increase profit growth visibility. In addition to growing FMCG profitability, advancements
in IT are significant and can provide further benefits.

The firm emphasised the significant improvement in its subsidiary, ITC Infotech, which has
seen better growth and a 4.3x increase under new leadership.

Equities & Liabilities Mar-21 Mar-20 Mar-19 Mar-18 Mar-17

Share Capital 1,230 1,229 1,225 1,220 1,214
Reserves & Surplus 56,067 60,777 54,725 50,179 44,126
Current Liabilities 10,174 9,089 9,621 8,856 6,830
Other Liabilities 4,108 4,138 4,224 2,124 2,044
Total Liabilities 71,580 75,235 69,797 62,381 54,215
Assets          
Fixed Assets 25,508 23,297 21,887 20,591 18,417
Current Assets 31,815 36,506 29,568 24,503 24,537
Other Assets 14,256 15,430 18,341 17,286 11,261
Total Assets 71,580 75,235 69,797 62,381 54,215
Other Info          
Contingent Liabilities 2,339 2,357 2,491 2,257 2,148
Balance sheet (Stand Alone)

Income Statement Quarterly

Quarterly Jun-21 Mar-21 Dec-20 Sep-20 Jun-20
Sales 12,959 13,294 12,580 11,976 8,911
Other Income 428 771 970 609 896
Total Income 13,388 14,066 13,551 12,586 9,808
Total Expenditure 9,362 9,209 8,689 8,298 6,662
EBIT 4,025 4,857 4,861 4,288 3,145
Interest 10 3 13 13 16
Tax 1,001 1,105 1,184 1,041 785
Net Profit 3,013 3,748 3,662 3,232 2,342

Cash Flow
Mar-21 Mar-20 Mar-19 Mar-18 Mar-17 Trend
Mar 17 - Mar 21
Operating Activities 12,527 14,689 12,583 13,169 10,627
Investing Activities 5,682 -6,174 -5,545 -7,113 -3,250
Financing Activities -18,633 -8,181 -6,868 -6,221 -7,301
Others 56 0 0 0 0
Net Cash Flow -366 334 169 -165 75
Cigarette sales increased by 33% year on year on predicted lines, powered by 31% volume
growth from a low base; nevertheless, volumes were 18-19% lower than in June 2019 due to
the second wave of Covid. The management emphasised a slow recovery beginning in mid-
June, with most markets returning to routine save for a few areas in Kerala, Odisha, and the
North East.

- Kotak

FMCG growth was lower on a high base, at 5-6 percent (ex-Sunrise). Margin expansion is on
pace, and it is anticipated to accelerate as additional pricing comes in to balance inflation.
The improvement in IT business (subsidiary) performance is noteworthy, with a 4.3x
increase in profitability in two years. Its increasing contribution to earnings (3 percent or
higher in FY21) may provide greater value.
Period High: Period Low: 199.10 Change in market-cap:    
239.15 1.79%
Date Open High Low Close
Aug-21 206.1 217.15 205.55 213.75
Jul-21 203 215.8 200.85 205
Jun-21 218.45 219.35 202.45 202.75
May-21 201.8 217.95 199.1 216.6
Apr-21 219.85 220.55 200.75 202.7
Mar-21 205 228.1 201.6 218.5
Feb-21 205 239.15 200.2 204.05
Jan-21 210 221.95 200.3 203.25

Historical Data for the Period : Jan-2021 to Aug-2021 on BSE

Compan Price % MCap(Cr TTM P/B ROE( 1 Yr Net Net Debt
y Name Ch ) PE %) Perform( Profit(Rs Sales(Rs to
g %) .) .) Equit
y
ITC 213.8 - 263,180.5 18.9 4.4 21.8 9.05 13,389 49,272 0
0.21 3 6
Godfrey 1,039.35 0.23 5,403.99 14.35 2.0 14.58 10.02 376 2,961 0.01
Phillip 9
VST 3,372.75 0.07 5,208.17 17.05 5.5 33.04 -3.4 310 1,110 0
4
The 42.45 - 271.56 128.64 0.7 0.59 60.19 0 157 0.18
Indian 1.62 7
Wood
Golden 115.25 4.96 202.94 26.62 - -3.74 444.92 7 41 -0.01
Tobacco

Capital Structure of ITC

Authorized Issued
Period Instrument -PAIDUP-
Capital Capital
From To   (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital

2019 - 2020 Equity Share 2000 1,229.22 12,292,231,241 1 1,229.22

2018 - 2019 Equity Share 2000 1,225.86 12,258,631,601 1 1,225.86

2017 - 2018 Equity Share 2000 1,220.43 12,204,294,911 1 1,220.43

2016 - 2017 Equity Share 2000 1,214.74 12,147,383,071 1 1,214.74

2015 - 2016 Equity Share 1000 804.72 8,047,206,991 1 804.72