1
Please refer to important disclosures at the end of this report
1
1
ITC Limited is engaged in the marketing of fast moving consumer goods
(FMGC). The Company operates through four segments namely FMCG, Hotels,
Paperboards, Paper and Packaging, and Agri Business. ITC has been a stellar
performer in the past one year. Increased clarity on GST rates and tax uniformity
across the nation has laid strong foundation for sustained earnings growth in
coming years. ITC has sustained its market leadership in the cigarettes space and
delivered robust performance in both revenue and profitability and regulations
with constant focus on innovation and distribution. ITC’s FMCG business is likely
to remain profitable. Paper business helps address packaging needs of FMCG
business with consistent quality and comparatively lower costs. Agri business has
seen robust performance aided by tobacco leaf and traded commodities exports;
provides strategic sourcing support to the company’s cigarette and branded
packaged foods businesses by ensuring high quality supplies. With a business
friendly government at the Centre, we expect hotel, paper and FMCG growth
rates to improve over ensuing years. The company is virtually debt free and has
robust liquidity. The company has healthy cash flow from operations of above
`9000cr as on Mar 2016 which is expected to be sufficient to fund its capital
expenditure requirements over the coming years. The company has a good
return on equity (ROE) of 32.60% for last 3 years. The company has been
maintaining a healthy dividend payout of 58.86% (Div yield: 1.8%). Hence Buy.
BUY
CMP `310
1.1
Reuters Code
ITC.BO
1
BSE Sensex
31,159
Nifty
9,625
Face Value (`)
FMCG
Market Cap (` cr)
3,77,055
52 Week High / Low
320/222
Avg. Daily Volume
10,22,054
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
ITC
Others | FMCG
May 31, 2017
2
ITC | FMCG
May 31, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement ITC
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)