We retain Buy on ITC with a revised PT of Rs. 280; discounted valuations at 17.4x its FY2023E EPS, enhancing enterprise outlook and dividend yield of four.Four% make it an appealing guess inside the FMCG area.
With enhancing mobility, regularisation in shop operations, and no hike in tax rate on cigarettes in the recent GST meet will assist cigarette volumes to get better at an excellent tempo inside the coming quarters (100% recovery by using Q2/Q3FY22).
Non-cigarette FMCG business sales increase to enhance to mid-teenagers with anticipated healing in out-of-domestic class; market proportion profits in personal care and biscuits and scale-up in lately acquired agencies inside the quarters in advance.
Non-cigarette FMCG enterprise OPM extended via 590 bps to eight.9% during the last four years; the business enterprise is that specialize in scaling in contribution of excessive-margin products, premiumisation thru new launches, and supply and operational efficiencies to improve enterprise margins ahead.
Valuations (Standalone) Rs. cr.
|
Particulars |
FY21 |
FY22E |
FY23E |
FY24E |
|
Revenue |
48,525 |
53,756 |
59,351 |
65,763 |
|
OPM (%) |
32.0 |
34.5 |
36.5 |
37.0 |
|
PAT |
13,032 |
14,371 |
17,052 |
19,058 |
|
EPS (Rs.) |
10.7 |
11.8 |
14.0 |
15.6 |
|
P/E (x) |
22.8 |
20.6 |
17.4 |
15.6 |
|
P/B (x) |
5.1 |
5.0 |
4.8 |
4.6 |
|
EV/EBIDTA (x) |
17.6 |
14.6 |
12.4 |
11.0 |
|
RoNW (%) |
21.2 |
24.2 |
28.0 |
29.9 |
|
RoCE (%) |
21.5 |
26.9 |
31.1 |
33.6 |
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