ITC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | ITC | Market Cap | 3,94,553 Cr. | Current Price | 315 ₹ | High / Low | 444 ₹ |
| Stock P/E | 19.5 | Book Value | 54.7 ₹ | Dividend Yield | 4.56 % | ROCE | 36.9 % |
| ROE | 27.9 % | Face Value | 1.00 ₹ | DMA 50 | 311 ₹ | DMA 200 | 358 ₹ |
| Chg in FII Hold | -1.28 % | Chg in DII Hold | 0.25 % | PAT Qtr | 5,297 Cr. | PAT Prev Qtr | 5,113 Cr. |
| RSI | 60.8 | MACD | 1.55 | Volume | 1,22,75,887 | Avg Vol 1Wk | 1,85,37,372 |
| Low price | 287 ₹ | High price | 444 ₹ | PEG Ratio | 2.12 | Debt to equity | 0.00 |
| 52w Index | 17.8 % | Qtr Profit Var | 5.59 % | EPS | 27.8 ₹ | Industry PE | 43.2 |
Core Financials:
ITC demonstrates strong fundamentals. ROE is excellent at 27.9% and ROCE at 36.9%, reflecting high efficiency. EPS of ₹27.8 is robust, supported by quarterly PAT growth (₹5,297 Cr vs ₹5,113 Cr, +5.59%). Debt-to-equity is 0.00, highlighting a debt-free balance sheet.
Valuation:
Stock P/E of 19.5 is attractive compared to industry average (43.2), suggesting undervaluation. PEG ratio of 2.12 indicates moderate growth expectations. Price-to-book is ~5.8, slightly expensive but justified by strong fundamentals. Dividend yield of 4.56% provides solid income support.
Business Model & Health:
ITC operates in FMCG, hotels, paperboards, and agri-business, with a diversified portfolio. Competitive advantage lies in strong brand equity, wide distribution, and debt-free structure. Overall health is robust, though growth in FMCG remains key for long-term expansion.
Entry Zone:
Ideal entry zone: ₹290–₹305. Current price ₹315 is near fair entry. Long-term holding is highly viable given strong fundamentals and dividend support.
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Positive
- Excellent ROE (27.9%) and ROCE (36.9%)
- Debt-free balance sheet
- Attractive dividend yield (4.56%)
- P/E lower than industry average (19.5 vs 43.2)
- Strong quarterly PAT growth (+5.59%)
Limitation
- PEG ratio (2.12) suggests moderate overvaluation risk
- Price-to-book (~5.8) is expensive relative to peers
- FMCG growth remains critical for sustained expansion
Company Negative News
- FII holdings reduced (-1.28%)
- Stock trading below 200 DMA (358 vs 315) indicates technical weakness
Company Positive News
- Quarterly PAT growth (₹5,297 Cr vs ₹5,113 Cr)
- DII holdings increased (+0.25%)
- Technical indicators show mild bullishness: RSI 60.8, MACD 1.55
Industry
FMCG sector trades at industry P/E of 43.2, supported by consumption growth and premium valuations. ITC trades at a discount, offering value relative to peers, with strong fundamentals and dividend support.
Conclusion
ITC is fundamentally strong with excellent efficiency, debt-free balance sheet, and attractive dividend yield. Rating: 4.3. Entry near ₹290–₹305 is preferable. Long-term holding (5+ years) is justified, with exit strategy around ₹430–₹440 if fundamentals stagnate.
Would you like me to also prepare a long-term dividend overlay HTML report for ITC, showing payout history, yield trends, and peer comparison with HUL and Nestlé India?