ITC - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.5

📊 Core Financials Analysis

Profitability

ROE of 27.3% and ROCE of 36.8% are outstanding — ITC is highly efficient in capital deployment.

EPS of ₹27.8 and quarterly PAT growth of ~4% show consistent earnings.

Zero debt (Debt-to-equity: 0.00) adds to financial robustness.

Cash Flow & Dividend

Strong free cash flows support a generous 3.51% dividend yield, making it attractive for income investors.

Stable payout history with room for increases.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 25.9 Reasonable vs. industry PE of 42.1 — undervalued

P/B Ratio ~7.29 High, but justified by strong ROE and brand value

PEG Ratio 2.84 Slightly elevated — growth priced in

Intrinsic Value Likely close to current price; undervalued relative to peers

🏢 Business Model & Competitive Advantage

Diversified Conglomerate

Cigarettes (high-margin), FMCG (growth engine), Hotels, Paper, and Agri — balanced revenue streams.

Moat

Brand strength, distribution network, and pricing power in cigarettes.

FMCG segment gaining traction with scalable potential.

Risks

Regulatory overhang on tobacco.

FII sentiment weakening (–1.89%), though DII support is strong (+1.72%).

📉 Technical & Sentiment Indicators

RSI at 35.3 — oversold zone, potential bounce.

MACD negative and trading below both 50-DMA and 200-DMA — bearish trend.

Volume slightly below average — consolidation phase.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹390–₹405 range (near support and RSI bottom)

Long-Term View

Ideal for conservative investors seeking stability, dividends, and moderate growth.

FMCG expansion and hotel demerger could unlock further value.

Hold for long-term compounding with low volatility.

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