The project involves evaluation of the stocks of ITC and based on that is the recommendation.

1. Since 1910
Recommendation – Strong Buy
A project by Santosh Lal

2. ITC has come a long way in last 10 years. The prices have rose significantly and
picked up a steady pace. ITC’s growth has been remarkable in these years. Starting
from just a closing price of Rs.34.71 / share in 2004, it reached Rs. 309.10 / share
in the year 2013.
Graphically presenting, the data clearly shows that the company has a bullish trait
Share Price 347.20
Total Market Capital Rs. 2,747 48 cr. ( $ 45.79 billion)
Shares Issued 7913252114
P/E Ratio 36.97
52 weeks high 380.00
52 Weeks low 281.15

3. Net sales and Net Profit chart of ITC (since 2008)
year high low Closing (as on march 31st
)
2004 39.51 20.63 34.71
2005 47.23 24.40 44.79
2006 100.00 44.07 97.48
2007 106.35 70.08 75.20
2008 119.70 73.08 103.18
2009 116.20 66.03 92.40
2010 136.35 88.80 131.58
2011 184.70 126.93 181.45
2012 227.75 177.80 226.85
2013 310.75 223.30 309.10

4. Balance sheet of ITC Ltd.
Particulars Mar'13 Mar'12
Liabilities 12 Months 12 Months
Share Capital 790.18 781.84
Reserves & Surplus 21497.67 17957.00
Net Worth 22287.85 18791.89
Secured Loan .00 1.77
Unsecured Loan 66.40 77.32
TOTAL LIABILITIES 22354.25 18870.98
Gross Block 16679.17 13926.34
(-) Acc. Depreciation 5469.83 4819.66
Net Block 11209.34 9053.63
Capital Work in Progress 1487.79 2572.06
Investments 7060.29 6316.59
Inventories 6600.20 5637.83
Sundry Debtors 1163.34 986.02
Cash and Bank 3615.00 2818.93
Loans and Advances 2881.47 1952.54
Total Current Assets 14260.01 11395.32
Current Liabilities 6404.43 6108.60
Provisions 5258.75 4411.07
Total Current Liabilities 11663.18 10519.67
NET CURRENT ASSETS 2596.83 875.65
Misc. Expenses .00 .00
TOTAL ASSETS 22354.25 18870.98
( In Rs. Cr)

5. Comparative balance sheet
Particulars Amt (2013) Amt. (2012 Change %
Net worth
22287.85 18791.89 119
Total Liability
22354.25 18870.98 118
Net Block
11209.34 9053.63 123
Current assets
14260.01 11395.32 125
Current liability
11663.18 10519.67 111
Total Assets
22354.25 18870.98 118
DuPont Analysis
Particulars HUL ITC
Net profit 3,796.67 7,418.39
Net sales 25,810.21 29,901.27
Net assets 2,674.02 22354.25
Net equity 216.25 790.18
PAT/ Equity (ROE) = PAT/Net sales X Net sales/ Net assets X net assets/ total equity
For HUL = 3797 /25810x 25810/2674x 2674 /216
= 0 .15 x 9.65 x 12.38
= 18
For ITC = 7418/29901 x 29901/22354 x22354/790
= 0.25 x 1.34 x 28.30
= 9.48
Analysis : All ratios of ITC are greater than HUL but net sales / net assets is muchlower
so ITC needsto increase both its sales and assets

6. SHARE HOLDING PATTERN OF ITC
1. Institution
2. Non- institution
CATEGORY OF
SHAREHOLDER
NO. OF
SHAREHOLDERS
TOTAL NO OF
SHARES
TOTAL SHARES IN
DEMATERIALISED
FORM
BODIES CORPORATE 4,094 369,492,872 368,368,022
INDIVIDUALS
INDIVIDUAL
SHAREHOLDERS
HOLDING NOMINAL
SHARE CAPITAL UPTO RS
1 LAC
450,604 686,042,457 555,990,828
INDIVIDUAL
SHAREHOLDERS
HOLDING NOMINAL
SHARE CAPITAL IN
EXCESS OF RS 1 LAC
688 137,936,153 120,641,873
QUALIFIED FOREIGN
INVESTORS
1 100 100
FOREIGNCORPORATE
BODIES
6 2,413,229,356 153,256
FOREIGNNATIONALS 12 533,023 88,783
TRUSTS 68 9,089,096 9,089,096
CATEGORY OF
SHAREHOLDER
NO. OF
SHAREHOLDERS
TOTAL NO OF
SHARES
TOTAL SHARES
IN
DEMATERIALISED
FORM
MUTUAL FUNDS/UTI 329 1,059,175,356 1,058,644,506
FINANCIAL INSTITUTIONS /
BANKS
5,656,383 5,100,633
INSURANCECOMPANIES 62 1,659,923,091 1,659,859,611
FOREIGNINSTITUTIONAL
INVESTORS (FII)
990 1,527,719,802 1,527,719,802
SUB TOTAL 1505 4,252,748,502 4,251,324,552

7. CLEARING MEMBERS 379 2,579,324 2,579,324
NON RESIDENTINDIANS
(NRI)
8,502 41,601,231 30,942,366
OTHERS 8,967 2,467,032,030 42,852,825
SUB - TOTAL 464,354 3,660,503,612 1,087,853,648
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CURRENT SHARE PRICE
CURRENT PRICE: RS. 347.20 (as of 17.3.14 at NSE) and Rs. 347.00 (as of 17.3.14 AT BSE)
BSE:
52 WEEKS LOW: RS. 281.15
52 WEEKS HIGH: RS. 380.00
NSE:
52 WEEKS LOW: Rs. 281.15
52 WEEKS HIGH: Rs. 380.00
-----------------------------------------------------------------------------------------------------------------------------

8. TOTAL MARKET CAPITAL
$. 45.79 billion
(7913252114 X Rs.347.20*)
* As of 16.3.2014 the rate of ITC’s share being Rs. 347.20 per share at NSE
EARNING PER SHARE (EPS)
EPS: 9.39
(Profit Before Taxes: Rs. 10,684.18 cr. )
PRICE EARNING RATIO
 36.97
ITC’s PRICE EARNING RATIO AND THE COMPETITORS IN THAT SEGMENT:-
DIVIDEND HISTORY
The company has a good dividend track report and has consistently declared dividends for the
last 5 years. For the year end March 2013, ITChas declared an equity dividend of 525.00%
amounting to Rs 5.25 per share. At the currentshareprice of Rs 347.20 this resultin a dividend
yield of 1.51%.

9. Date Div
announced
Dividend
(%)
Remarks
17-05-13 525.00 Rs.5.2500 per share
25-05-12 450.00 Recommended a Special Dividend of Rs. 1.65
per Ordinary Share of Re. 1/- each and a
Dividend of Rs. 2.80 per Ordinary Share of
Re.1/- each.
20-05-11 445.00 Special Centenary dividend of Re. 5.50 per
Ordinary Share of Re 1/- each and a dividend
of Re. 4.50 per Ordinary Share for the
financial year ended March 31, 2010.
21-05-10 1,000.00 --------------------
22-05-09 370.00 --------------------
23-05-08 350.00 --------------------

10. About ITC
ITC Ltd is one of India’sforemost Pvt. Sector companies. It is highly
diversified and has a large presence in all over India.
 Undisputed leader in IndianTobacco Market with 80% of market
share
 Rated among world’s most reputable companies by Forbes magazine
 Rated among world’s best big companies and Asia’s Fab 50 by
Business Week magazine.
 Highest market capitalizationamong all the FMCG companies in
India.
Industries ITC is involved in:
 Tobacco
 Hotels
 Paperboardsand specialty papers
 Packaging
 Agri- Business
 Packaged food and confectionary
 Information Technology
 Branded Apparel
 Personal care
 Stationary
 Safety Matches
 Other FMCG products

11. ITC was incorporated on August 24, 1910 under the name Imperial
Tobacco Company of India Ltd. As the company'sownership
progressively Indianised,the name of the company was changed
from Imperial Tobacco Company of India Ltd to India Tobacco
Company Ltd in the year 1970 and then to I.T.C. Ltd in the year 1974.
In recognition of the company's multi-businessportfolio
encompassing a wide range of businesses - Cigarettes & Tobacco,
Hotels, Information Technology,Packaging, Paperboards& Specialty
Papers, Agri-business, Foods, Lifestyle Retailing,Education&
Stationery and Personal Care - the full stops in the company's name
were removed effective September 18, 2001. The company now
stands rechristened ITC Ltd.
It is to be noted that ITC’s overall sales of cigarettes has a share of
64% followed by its FMCG sales at 16%. Agri and paper businesses
make up 10% and 7% of overall revenues whereas hotel business is
the smallest segment with a 3% sales share.

12. FMCG AND CIGARETTE INDUSTRY IN INDIA
FMCG:
The Indian FMCG sector is the fourth largest in the Indian economy and has a market sizeof
$13.1 billion. This industry primarily includes the production, distribution and marketing of
consumer packaged goods, that is thosecategories of products which are consumed at regular
intervals. The sector is growing at rapid pace with well-established distribution networks and
intense competition between the organized and unorganized segments. Ithas a strong and
competitive MNC presenceacross the entire value chain. The FMCG’s promising market
includes middle class and the ruralsegments of the Indian population, and give brand makers
the opportunity to convertthem to branded products. Itincludes food and beverage, personal
care, pharmaceuticals, plastic goods, paper and stationery and household products etc.
Due to high inflation, muted salary hikes and slowing economy growth urban consumers spent
less in the calendar year 2012. The overall slowdown in the economy has begun to affect the
FMCG sector with companies posting deceleration in volumegrowth in the recent
quarterly results. But it is predicted that growth will come fromruraldwellers that are
expected to see a risein disposableincomes due to the direct cash transfer scheme, while
urban consumers willcontinue to be affected by the macroeconomic environment.
Company Market capitalization
ITC 256,769 cr.
HUL 127,144 cr.
Nestle India 49,768 cr.
Godrej consumer products ltd. 28,107 cr.
Dabur India ltd. 27,261 cr.
GlaxoSmithKline consumer
healthcare
23,435 cr.
Colgate Palmolive 18,329 cr.
Marico ltd. 13,137 cr.
Emami 10,788 cr.
Procter & Gamble 9,555 cr.

13. Tobacco:
India is the second largest producer of tobacco in the world and one of the leading tobacco
exporting countries in t he world. Tobacco occupies a prime place in the Indian economy on
account of its considerablecontribution to the agricultural, industrial and export sectors.
Although the Indian cigarette marketdecreased by 1% through 2012, still the country saw a
huge volume sales of 102.1 billion sticks. Thedecrease was mainly due to the increased excise
tax by central Govt. and high VAT by the state Govt. Over the next five years, retail volume
sales of cigarettes in India are expected to decline marginally, while constantvalue growth is
expected to increase by 3% by 2017.
The major players in cigarette market in India are ITCLtd., Godfrey Philips India Ltd and VST
Industries. ITC is theundisputed leader in the industry which holds the largestmarket share.
80%
11%
8%
1%
Retail volume share
ITC Ltd.
Godfrey Philips India Ltd.
VST Industries
Others

14. Indian economy
India is a G-20 major economies and ranks 3rd
as per PPP and 10th
as per nominal
GDP. India’s GDP touched a all time high of 9.3% in 2010 – 11. For the fiscal year
2012 -13 the GDP was 5% and the analysts predict it is set to grow again in near
future. The inflation rate according to CPI is 8.79% and WPI is 5.05%.
India’s economy was based on mixed economy combining both socialism and
capitalism features but in 1991 it adopted liberal and free market principles and
liberalized the economy to international trade. Following this reforms and a strong
focus on development the country economy grew with a rapid pace.
Post independence India was highly dependent on aids from few countries, but
slowly after new reform over a period of time it became less dependent on aids
and especially after the 1991 reforms, India witnessed a high growth and came out
as a major global player. India now stands as the 19th
largest exporter in the world.
Agriculture is the main driving force behind Indian economy. Once deficient in
food production, India today is one of the largest producers of crops and now is a
crop surplus nation. The declining poverty rate, overall infrastructural
development and growing capital market is a proof of India’s growth as a major
economy.
India has earned a high reputation in the Information Technology sector. The share
of the Indian IT industry in the country's GDP increased from 4.8% in 2005–06 to
7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology
outsourcing companies in the world. Similarly Indian automobile industry is
witnessing a rapid growth. Many Indian companies manufacture automobiles
indigenously. Companies like TATA, Mahindra & Mahindra and Bajaj has put India
in the global stage in automobile industry. As the third-largest economy in the
world in PPP terms, India is a preferred destination for FDI during the year 2011,
FDI inflow into India stood at $36.5 billion, 51.1% higher than 2010 figure of
$24.15 billion

15. The main sectors in Indian economy are:
 Agriculture
 Industry
 Textile
 Services (includes IT enabled services)
 Retail
 Mining
 Tourism
 Energy and Power
 Banking and Finance.
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Analysis
ITC is one of the most stable stock in the market it h as shown a greater return in 5
years. It has reached the level of 300 from the level 40 in 2008-09. It has shown
return of more than 700% in five years. Suppose if someone has bought 1000
shares of ITC in Jan 2009 at the level of 40m and holds the stock for 6 years and
now wants to sell the stock in 2014, he makes a profit of more than 260 per share.
Overall profit of 2,60,000. He invested only 26000 in 2009 and after 5 years gets
back more than 3 lacs’.
ITC has shown a steady growth in 5 years. 2010-11 was the most important phase
in the company history where it traded from the level of 60 – 180. Giving about
200% return in a year. Since then the stock has made new high every year. It has
not shown any kind of gradual decrease within five years. Technically it is bullish
and has the capability to show same kind of growth in coming five years.