• OUTLOOK ARENA
  • VIEWS ON NEWS
  • MAY 24, 2000

ITC posts sharp improvement in OPM for FY00

ITC has reported a sharp improvement in net profit margins for the year ended 31st March 2000. The company has benefited from a 470 basis points jump in operating margins and a 31% drop in interest expenditure.

(Rs m) FY1999 FY2000 Change
Net Sales 35,159 38,192 8.6%
Other Income 1,218 1,163 -4.5%
Expenditure 24,433 24,755 1.3%
Operating Profit (EBDIT) 10,726 13,437 25.3%
Operating Profit Margin (%) 30.5% 35.2%  
Interest 1,641 1,126 -31.4%
Depreciation 1,023 1,185 15.8%
Profit before Tax 9,380 12,290 31.0%
Tax 3,146 4,365 38.8%
Profit after Tax/(Loss) 6,234 7,925 27.1%
Net profit margin (%) 17.7% 20.8%  
Earnings per share 25.4 32.3  

The topline growth has been modest at 8.6% despite the fact that volumes dipped 3.5%. However, it is necessary to point out that during the fourth quarter sales actually jumped 14%. The rise in margins can be attributed to the improved product mix.

The stock currently trades at a P/E multiple of 20, which is significantly lower than multiples recorded at the end of the previous three financial years (FY97 - 33.3, FY98 - 35.3, FY99 - 41.1).

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407