What is the future of ITC stock?
ITC is one of India's foremost private sector companies with a market capitalization of USD $ 50 billion and Gross Sales Value of USD $ 10 billion. ITC has a diversified presence in FMCG, Hotels, Packaging, Paperboards & Specialty Papers and Agri-Business.
It’s a business leader and has over 80% market share in the Cigarette industry while over the period of time it has been continuously moving its dependence away by diversifying into other sectors.
Historically ITCs Total Shareholder Returns CAGR since 1996 22.3% as on March 2019. Currently, ITC’s FMCG products reach 130 million households in India . And it is yet to get the FMCG Valuations.
It carries a huge Brand Leadership in various sub-sectors
The existing Brand of ITC and some of the upcoming projects
The new range of branded package food include Staples, Biscuits, Snacks, Noodles, Pasta, Juices, Chocolates, Coffee, Spices, Dairy Beverages, Milk, Ghee, Paneer, Confectionery, Chewing Gums, Salt, Ready to Eat, Instant Mixes
New Launches
Likewise, they have a whole new range of Personal Care products[6] Soap, Shower Gel, Body Wash, Hand Wash, Bath Care, Deodrants, Fine Fragrances, Skin Care, Antiseptic Liquid, Hand Sanitizer, Floor Cleaner
Some of the New Launches in the Space
Dividends
Let say you had bought the stock 10 years back after the 2008–09 bear market was over and the prices came to their previous levels at Rs. 85 in 2010.
You would be surprised to see that more or less the same amount you have received as divided during the years
Growth
With structural drivers of growth firmly in place – favorable demographics, rapid urbanization, accelerated digitalization and connectivity, and improvement in infrastructure - the pace of economic growth is expected to pick-up over time.
When that happens ITC would lead the pack.
Overall the profitability of the corporates to the GDP has been in a downward direction over some time.
Cigarettes contributed 46% to ITC’s segment revenue, followed by FMCG-Others at 25%, agri-business at 12%, paper, and paperboards at 9% and hotels at 4% in FY2019.
Increasing diversity is one of the strong points of the company.
Financial Profile
ITC has demonstrated its ability to maintain the PBIT margin in the business, which stood at a healthy 37% of divisional revenues. The sales growth deteriorated which is one of the main reasons that future earning forecast has been weak.
With a Market Capitalization of Rs. 2,15,000 cr it has cash and liquid investments of around Rs. 28.9k crores.
ITC operates in five business segments at present — Cigarettes, FMCG Others, Hotels, Paperboards, Paper and Packaging, and Agri-Business. In FY 2019, the company reported a Profit After Tax of Rs. 12.8k crore on an operating income of Rs. 48.3k crore compared to a Profit After Tax of Rs. 11.4k crore on an operating income of Rs. 43.4k crore in FY2018.
Valuations
While writing the article the price of ITC is Rs. 154. This price level is not cheap but it surely has some magin safety

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