⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ITC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | ITC | Market Cap | 3,87,657 Cr. | Current Price | 309 ₹ | High / Low | 465 ₹ |
| Stock P/E | 19.2 | Book Value | 54.7 ₹ | Dividend Yield | 4.64 % | ROCE | 36.9 % |
| ROE | 27.9 % | Face Value | 1.00 ₹ | DMA 50 | 362 ₹ | DMA 200 | 398 ₹ |
| Chg in FII Hold | -1.28 % | Chg in DII Hold | 1.49 % | PAT Qtr | 5,297 Cr. | PAT Prev Qtr | 5,113 Cr. |
| RSI | 18.4 | MACD | -17.2 | Volume | 3,59,70,415 | Avg Vol 1Wk | 3,55,99,742 |
| Low price | 306 ₹ | High price | 465 ₹ | PEG Ratio | 2.08 | Debt to equity | 0.00 |
| 52w Index | 2.14 % | Qtr Profit Var | 5.59 % | EPS | 27.8 ₹ | Industry PE | 43.2 |
📊 Core Financials
- Revenue & Profitability: PAT improved from 5,113 Cr. to 5,297 Cr. QoQ (+5.59%), showing consistent earnings growth.
- Margins: ROE at 27.9% and ROCE at 36.9% are excellent, reflecting strong efficiency and shareholder returns.
- Debt: Debt-to-equity ratio of 0.00 highlights a debt-free balance sheet, ensuring financial stability.
- Cash Flow: Dividend yield of 4.64% provides strong shareholder reward, supported by robust cash flows.
💹 Valuation Indicators
- P/E Ratio: 19.2 vs Industry PE of 43.2 → undervalued compared to peers.
- P/B Ratio: Current Price (309 ₹) / Book Value (54.7 ₹) ≈ 5.65, relatively expensive on book value basis.
- PEG Ratio: 2.08 suggests valuation is stretched relative to growth prospects.
- Intrinsic Value: Current price near 306 ₹ (low) indicates attractive entry zone compared to historical highs (465 ₹).
🏦 Business Model & Competitive Advantage
- ITC operates in diversified segments: FMCG, cigarettes, hotels, paperboards, and agribusiness.
- Competitive advantage lies in strong brand portfolio, wide distribution network, and debt-free structure.
- Overall health is robust, with consistent profitability and strong cash generation.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive entry between 300 ₹ – 320 ₹, near support levels.
- Long-Term Holding: Strong fundamentals and undervaluation relative to industry PE make ITC suitable for long-term investors seeking stability and dividends.
✅ Positive
- Debt-free balance sheet ensures financial stability.
- Strong ROE (27.9%) and ROCE (36.9%).
- High dividend yield (4.64%) provides steady income.
- Undervalued compared to industry PE.
⚠️ Limitation
- P/B ratio (5.65) indicates expensive valuation relative to book value.
- PEG ratio (2.08) suggests growth may not fully justify valuation.
- RSI (18.4) and MACD (-17.2) indicate bearish technicals.
📉 Company Negative News
- FII holdings decreased (-1.28%), showing reduced foreign investor confidence.
- Stock trading below DMA 50 (362 ₹) and DMA 200 (398 ₹) indicates technical weakness.
📈 Company Positive News
- DII holdings increased (+1.49%), reflecting strong domestic institutional support.
- PAT improved QoQ, showing consistent earnings growth.
🏭 Industry
- Industry PE at 43.2 is much higher than ITC’s PE (19.2), highlighting undervaluation.
- FMCG and tobacco sectors remain resilient with steady demand.
- ITC benefits from diversification across FMCG, agribusiness, and hotels.
🔎 Conclusion
- ITC offers strong fundamentals, excellent return ratios, and a debt-free balance sheet.
- Valuation is attractive compared to industry peers, making it a good long-term holding.
- Best suited for investors entering near 300–320 ₹, with potential upside as fundamentals remain strong and dividend yield supports returns.
I can also prepare a comparative HTML report of ITC versus other FMCG giants like HUL and Nestlé India to highlight relative valuation and dividend strength.