Check Before You Invest : ITC Ltd

BSE: 500875 NSE: ITC ISIN: INE154A01025

| Sector: FMCG | Industry: Cigarettes/Tobacco

Snapshot

Q.1 Which industry/sub-sector does ITC Ltd belong to?

ITC Ltd belongs to the FMCG sector, operating specifically within the Cigarettes/Tobacco segment.

Q.2 Is ITC Ltd a good quality company?

ITC Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is ITC Ltd undervalued or overvalued?

ITC Ltd appears Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is ITC Ltd a good buy now?

ITC Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of ITC Ltd?

ITC Ltd revenue growth is 10.7% for FY-2025, which is above its 5-year CAGR of 8.73%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of ITC Ltd?

ITC Ltd Return on capital employed is 37.91% for FY-2025, which is in line with its 5-year historical median of 36.71%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of ITC Ltd?

ITC Ltd Return on Asset is 23.45%, which is in line with its 5-year historical median of 23.45%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of ITC Ltd?

ITC Ltd Return on equity is 28.87% for FY-2025, which is in line with its 5-year historical median of 28.73%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of ITC Ltd?

ITC Ltd Cash conversion cycle is 48 days, above its 5-year historical median of 35 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.87	0.81
ROE	28.87	28.73
ROCE	37.91	36.71
Cash Conversion Cycle	48 days	35 days

Q.6 Gross Profit margin of ITC Ltd?

ITC Ltd Gross profit margin which is the profit after deduction of direct costs, is 37% for FY-2025, which is in line with its 5-year median of 37.5%, indicating stable margins.

Q.7 Operating Profit Margin of ITC Ltd?

ITC Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 34.5% for FY-2025, which is in line with its 5-year median of 34.5% indicating stable margins.

Q.8 Net Profit Margin of ITC Ltd?

ITC Ltd Net Profit Margin is 28.98% for FY-2025, is in line with with its 5-year median of 28.65%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	37	37.5
Operating Profit Margin	34.5	34.5
Net Profit Margin	28.98	28.65

Q.9 Debt to Equity ratio of ITC Ltd?

ITC Ltd Debt-to-Equity ratio is 0.00, which is above with the industry average of , indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of ITC Ltd?

ITC Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of ITC Ltd?

Promoters hold 0.00% of the ITC Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of ITC Ltd vs industry peers?

ITC Ltd revenue CAGR is 8.73%, compared to the industry median CAGR of 8.73%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	10.7	8.7
Gross Profit Growth	1.7	5.6
Operating Profit Growth	2	5.9
Net Profit Growth	0.9	5.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.87	0.81
ROE	28.87	28.73
ROCE	37.91	36.71
Cash Conversion Cycle (days)	48.22	35

Valuation & price assessment

Q.1 Stock return of ITC Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 4.2% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	4.2%	9.6%	-9.5%	-26.8%

Q.3 Valuation ratios of ITC Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	19.68	25.44	28.10
Price to Book	5.36	6.92	3.26
Price to Sales	5.09	6.84	3.14
EV to EBITDA	13.89	18.20	18.20

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