It cfinal

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It cfinal

  1. 1. 1 ITC LImITedITC LImITed One Of IndIa’s mOsT VaLuabLeOne Of IndIa’s mOsT VaLuabLe COrpOraTIOnsCOrpOraTIOns presenTed bY deVKInandan purOHIT – 15
  2. 2. 2  One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004  Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 19 bln. & are rated as the ‘most attractive companies for investors’  Only Indian FMCG Company to feature in Forbes 2000 List  A comprehensive ranking of world’s biggest companies measured by a composite of sales, profits, assets & market value  Among top in :  Sustained value creation (BT-Stern Stewart survey)  Operating profits  Cash Profits  Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09)  No. 1 in FMCG Sector  Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey 2006) ITC One of India’s most valuable corporations
  3. 3. HOnOurs & aWards 3
  4. 4. 4 sTraTegY Of OrganIsaTIOn TO manage dIVersITY Of pOrTfOLIO Formal 3-tiered governance structure:  Board of Directors :  Comprising executive (4) and non-executive directors (11)  Strategic supervision  Corporate Management Committee :  Comprising executive directors and senior managers  Strategic management  Divisional Chief Executive & Divisional Management Committee :  Executive management
  5. 5. 5  Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities  Pursue World class competitiveness in all businesses and across the entire value chain  Best-in-class in terms of:  Internal Vitality  Market Standing  Profitability  Strategy of Organisation and Governance processes geared to manage multiple businesses  Blend core competencies and leverage ITC umbrella strengths to create new avenues of growth COrpOraTe sTraTegIes
  6. 6. 6 ITC - busIness pOrTfOLIO ITC
  7. 7. busIness anaLYsIs 7 58% A 10% E 16% D 11% C 5% B Segment Revenue FY08 59% A 11% E 14% D 12% B 4% A Segment Revenue FY09 A. Cigarette B. Hotel C. Other FMCG D. Agri E. Paper
  8. 8. 8 FMCG - Cigarettes
  9. 9. 9  Market leadership  Powerful brands across segments  Leadership in all segments - geographic & price  Extensive FMCG distribution network  Direct servicing of 1,00,000 markets & 2 million retail outlets  World-class state-of-the-art technology and products  Investment - Rs.10 billion in six years  Exciting long term growth potential ITC’s CIgareTTes busInessITC’s CIgareTTes busIness
  10. 10. CIgareTTe brands frOm ITC.  Gold Flake, Wills, Classic, Insignia  India Kings, Silk Cut, Navy Cut  Capstan, Scissors  Berkeley, Bristol and Flake.
  11. 11. 11  Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation  Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector  Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes  Future growth depends on relative rates of growth of per capita income and moderation in taxes CIgareTTes: grOWTH pOTenTIaL
  12. 12. 12
  13. 13. 13  Competitive context • Competition including international majors becoming more active • Domestic illegal volumes still very strong. Along with smuggled contraband, emerges as substantive segment  Regulatory & Taxation • Pictorial Graphic warnings in place w.e.f. June 09. • VAT hikes in Maharashtra, Delhi & Rajasthan - threatening the concept of the ‘Indian Common Market’. CIgareTTes: CHaLLenges
  14. 14. COnTrIbuTIOn Of reVenues frOm CIgareTTes
  15. 15. Cigarette tax StruCture
  16. 16. Other FMCg FrOM itC Ready to Eat Foods : Kitchens of India Staples : Aashirwaad Atta Confectionery : mint-o Fresh & Candyman Snack Foods : Sunfeast Biscuits, Sunfeast Pasta Treat, BINGO!
  17. 17. itC hOteL BuSiNeSS
  18. 18. “Hotels posted impressive performance during the year with segment revenues growing by 26%”.
  19. 19.  Second Largest Hotel Chain in India – Presence acrossSegments  The ITC Welcomgroup has a presence in the premium, budget and heritage segments, either directly or through subsidiary and joint ventures.  Five catagories of hotel – ITC Luxury collectionFortune Hotels – ITCWelcomGroup Sheraton – WelcomHotel – Fortune – WelcomHeritage
  20. 20.  The hotel business of the company is expected to give a major boost to the earnings of the company on the back of events like CommonWealth Games in 2010 & Cricket World Cup in 2011. We believe going forward, the hotel business will improve margins.  'Hotel Industry in India' seconds only to China in Asia Pacific
  21. 21.  'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012.  Government has approved 300 hotel projects, nearly half of which are in the luxury range
  22. 22. Performance Indicators: Source:HVS International
  23. 23. City Exis ting Supply Proposed Supply Increase over Five years Active Development of Supply Luxury First Class Mid Market Budget Agra 1336 670 50% 55% 0.00% 22.40% 77.60% 0.00% Ahmedabad 675 3664 543% 47% 6.80% 32.00% 36.70% 18.30% Bangalore 3456 15542 450% 60% 19.40% 31.80% 30.20% 10.80% Chandigarh 340 1813 533% 54% 15.70% 28.80% 21.10% 34.40% Chennai 2826 7147 253% 71% 26.80% 31.20% 15.60% 16.50% Delhi-NCR 9019 22360 248% 51% 25.10% 29.70% 30.90% 10.40% Goa 2768 3353 121% 42% 35.40% 46.40% 7.20% 11.00% Hyderabad 2554 8250 323% 64% 35.00% 23.30% 24.10% 24.30% Jaipur 1556 2937 189% 53% 0.00% 16.50% 52.50% 31.00% Kolkata 1396 5965 427% 49% 23.40% 30.10% 34.90% 9.20% Mumbai 8454 10613 126% 62% 30.60% 29.90% 20.50% 10.50% Pune 1346 8243 612% 66% 22.00% 29.30% 31.40% 25.00% Other Citie s 11256 23909 212% 60% 2.30% 26.00% 26.00% 30.30% Total 46982 114466 244% 58% 19.60% 28.80% 29.60% 18.00%
  24. 24. itC PaPer BuSiNeSS
  25. 25. “The superior qualit y of I TC’s Element al Chlorine Free pulp has enabled expansion of t he market f or value added paperboards”
  26. 26. “The superior qualit y of I TC’s Element al Chlorine Free pulp has enabled expansion of t he market f or value added paperboards”
  27. 27.  ITC's Paperboards Division is India's largest and most technologically advanced paper and paperboards business  Manufacturing units produce more than 500000 TPA of paper and paperboards that meet stringent quality requirements across the world
  28. 28. iNdiaN PaPer iNduStry  Growth of 10% in per capita consumption of paper over the last one year. Per capita  Paper consumption increased to 8.3 kg as of December 2008 as compared to 7.5 kg during 2007-08, as per estimates of Indian Paper Manufacturers Association (IPMA).  The Indian paper industry accounts for about 1.6% of the world's production of paper and paperboard  ITC enjoys the 80% market share in the paperboard segment.
  29. 29. 30 Agri BusinessesAgri Businesses -- LeAf ToBAccoLeAf ToBAcco - Agri commodiTies- Agri commodiTies
  30. 30. ITC’s Agri – business has two key product segments – tobacco and other commodities. It is one of the largest exporters of Agri products from the country ITC sources the finest of Indian Feed Ingredients, Food Grains, Edible Nuts, Marine Products, Processed Fruits, Coffee and Spices. ITC is the largest buyer, processor and exporter of leaf tobaccos in India ITC`s Agri exports constituted nearly 60% of the foreign exchange earnings of $3.2 billion
  31. 31. segmenT wise revenue
  32. 32. revenue BreAk-up of Agri - Business in fY09 21% 16% 11%21% 7% 9% 13%
  33. 33. e-cHoupAL 35
  34. 34. e cHoupAL • e Choupal is an initiative of ITC Limited to link directly with rural farmers for agricultural / aquaculture produce like soybeans, wheat, coffee, and prawns. • eChoupal was conceived to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries.
  35. 35. Long term goal is to use e-choupals as sales points for soya bean oil and a range of other consumer goods. It began in 2000 with soya farmers in madhya pradesh Focus is on creating internet access for global market information to guide production and supply decisions. Currently 5300 e-choupals covering 33000 villages & over 3 million farmers.
  36. 36. • 4 kinds of e-choupals for prawns, coffee, wheat and soya beans • Focus is on creating internet access for global market information to guide production and supply decisions. • Long term goal is to use e-choupals as sales points for soya bean oil and a range of other consumer goods.
  37. 37. • E-choupals will be targeted to drive their product sales • E-choupal network is also used to sell ITC and third party products to the villages. • E-choupal will soon also provide IT enabled services like health advisories, education and e-governance.
  38. 38. e-cHoupAL suppLY cHAin
  39. 39. finAnciALs ouTLook
  40. 40. compAnY deTAiLs • CMP(7th June 2009) Rs 245 • Sector FMCG • BSE Code 500875 • NSE Symbol ITC • Market Cap (Rs. cr) 92,879.01 • Free Float (%) 48.6% • 52- wk HI/Lo 252/132 • Avg. volumes (1Mth) 489579 • Face Value Re. 1 • Dividend (FY09) 370% • Shares o/s (No.) 377.4 crs.
  41. 41. Shareholding Pattern 31StMarch2009 • Foreign Promoters :- 46.79% • Institutional (Incl. FII) :- 37.74% • Corporate Bodies :- 3.48% • Public &others :- 11.95% • Government :- 0.04%
  42. 42. Financial PerForMance Report
  43. 43. cigarette BuSineSS revenue
  44. 44. revenue FroM FMcg
  45. 45. revenue FroM hotel BuSineSS
  46. 46. revenue FroM PaPer BuSineSS
  47. 47. eBit Break down
  48. 48. turnover
  49. 49. turnover and tax Paid
  50. 50. how Market diScountS itc • Market Cap (In Cr.) :- 92,879.01 • Book Value :- 36.24 • EPS ( F.Y.10) :- 8.88 • Trading Rate :- 245 • Fair Value :- 318.91 • Fair Value = 36.24 * 8.88 = 318.91
  51. 51. recoMMendation • BSE weightage 5.4 % • i.e If Market Moves Up ITC Supports to market by 5.4 bases point and vice versa. • Future Value Discounted as per EPS F.Y 10 36.24 * 11.3 = 318.91 F.Y 11 36.24 * 13.3 = 481.92
  52. 52. Future oF itc • ITC is that it continues to have elasticity in pricing for some of its cigarette brands(gold flake filter, scissors filter).Next price increase can fetch additional revenue of 100cr! • VAT IS GOING TO BE REPLACED WITH GST.(Goods & Service Tax) That means no immediate increase in excise duty. • "Ultimately we hope to see a convergence or a chain link between the farm products and the branded end,"
  53. 53. 55

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