ITC Success Story: Fundamental & chart Analysis

The Beginnings of a Phenomenal Company

Today, I want to share with you the incredible story of a multinational company that started from humble beginnings. This company, which now boasts an annual revenue of 78000 crores, was actually founded in a rented house with borrowed money from a prostitute. Can you guess which company I'm talking about? I'll reveal the answer later, but first, let's dive into the fascinating history of this top 10 Indian company.

Back in 1910, a small business named Bux Ilahi was established by a visionary entrepreneur. Little did anyone know that this small venture would eventually become a giant in the FMCG industry. The company initially focused on the tobacco business, but it quickly expanded into other sectors, including FMCG and hotels.

 

Achievements and Success

Fast forward to the present day, and this company has achieved remarkable milestones. With a total value of over 6 lakh crores, it dominates the cigarette industry with a market share of 73%. Additionally, the company has a staggering customer base of more than 90 lakh crores and its products are available in over 60 lakh shops.

Not only has this company established itself as a leader in the FMCG sector, but it has also made a name for itself in the hotel industry. With 115 hotels in more than 80 locations across India, including some of the most luxurious hotels, it has become a prominent player in the hospitality sector.

Furthermore, this company has a strong commitment to social welfare. In 1990, it launched E-Chaupal, an initiative aimed at helping farmers improve their farming practices. Today, more than 40 lakh farmers are connected to this platform, which has had a significant impact on their lives.

The Company Name is ITC( Indian Tobacco Company)

 

Diversification and Growth Potential of ITC

Now, let's shift our focus to the future and explore the growth potential of ITC. As marketers, we understand the importance of diversification and seizing opportunities for growth. By analyzing various segments of the company, we can gain a clearer picture of its potential.

Starting with the cigarette business, which generates a substantial revenue of around 40% on a year-on-year basis, we can see a growth rate of 3.6% in segment revenue. Moving on to the FMCG segment, there has been a growth of 1.6% from 2020 to 2024, indicating a positive trend.

 

 

One of the company's notable achievements is its success in the hotel industry. With a segment revenue of 842 crores and a year-on-year growth rate of 18%, it has established itself as a key player in the luxury hotel market.

However, it's important to note that the paper board and packaging segment has experienced a decline in revenue, with a decrease of 99.7% in segment revenue. While this may seem concerning, it doesn't have a significant impact on the overall performance of the company.

When we combine the revenue from different segments, we can see that cigarettes contribute to 61.5% of the total revenue, while branded packaged food products account for 38.6%. This diversification across multiple sectors ensures a stable and balanced revenue stream for the company.

 

Fundamental Analysis and Chart Insights Of ITC

Now, let's delve into the fundamental analysis and examine the company's financial indicators. Looking at the chart, we can observe a previous rally that saw the stock reach a high of around Rs 500. However, there was a subsequent fall, and the stock is currently consolidating in a sideways pattern.

When evaluating the company's valuation, we can see that its P/E ratio is at a reasonable level of 23.4, and the P/S ratio stands at 25.7. The PG ratio, which indicates the price-to-earnings growth, is slightly lower at 2.20, suggesting that the stock may be slightly undervalued.

 

 

Furthermore, the company has maintained a return on investment (ROE) above 15%, indicating its profitability and efficiency. It also has a nominal debt of Rs 284 crores, highlighting its strong financial position.

Another noteworthy aspect is the company's consistent operating profit margin (OPM) percentage, which has remained at around 35-36% since 2012. This stability demonstrates the company's ability to generate consistent profits.

While it's worth mentioning that the company doesn't have a promoter, this is not a cause for concern. It is a professionally managed company with significant holdings from foreign institutional investors (FII) and domestic institutional investors (DII). The government's holding is minimal at 0.04%, and the public holds a substantial stake of 15.25%.

 

The Quest for Growth

Now, the question arises: What is the next growth catalyst for this company? I invite you to share your thoughts in the comments and engage in a discussion about its future prospects.

As we've witnessed throughout its remarkable journey, this company has continuously adapted and diversified to stay ahead in the market. Its commitment to innovation, social welfare, and customer satisfaction has played a crucial role in its success.

While the future is uncertain, one thing is clear: this company has the potential to continue its growth trajectory and overcome any challenges that come its way. With its strong foundation, diverse business segments, and strategic investments, it is well-positioned to navigate the ever-changing business landscape.

As we conclude this blog, I hope you've found inspiration in this incredible success story. Remember, every great achievement begins with a humble start, and with determination and perseverance, anything is possible.

 

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