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ITC 2018-19 Annual Report Analysis
Sun, 31 Mar

ITC has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

ITC Income Statement Analysis

  • Operating income during the year rose 19.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 8.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 39.3% in FY19 as against 43.1% in FY18.
  • Depreciation charges increased by 13.0% and finance costs decreased by 37.9% YoY, respectively.
  • Other income grew by 18.7% YoY.
  • Net profit for the year grew by 11.7% YoY.
  • Net profit margins during the year declined from 29.3% in FY18 to 27.4% in FY19.

ITC Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 392,093 468,433 19.5%
Other income Rs m 18,367 21,807 18.7%
Total Revenues Rs m 410,460 490,240 19.4%
Gross profit Rs m 169,161 184,254 8.9%
Depreciation Rs m 12,363 13,966 13.0%
Interest Rs m 1,150 714 -37.9%
Profit before tax Rs m 174,015 191,381 10.0%
Tax Rs m 59,164 63,139 6.7%
Profit after tax Rs m 114,851 128,242 11.7%
Gross profit margin % 43.1 39.3
Effective tax rate % 34.0 33.0
Net profit margin % 29.3 27.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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ITC Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 100 billion as compared to Rs 93 billion in FY18, thereby witnessing an increase of 8.2%.
  • Long-term debt down at Rs 82 million as compared to Rs 115 million during FY18, a fall of 29.1%.
  • Current assets rose 20% and stood at Rs 317 billion, while fixed assets rose 6% and stood at Rs 400 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 717 billion as against Rs 642 billion during FY18, thereby witnessing a growth of 12%.

ITC Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 506,361 571,429 12.9
 
Current Liabilities Rs m 92,502 100,120 8.2
Long-term Debt Rs m 115 82 -29.1
Total Liabilities Rs m 642,409 717,390 11.7
 
Current assets Rs m 263,936 317,473 20.3
Fixed Assets Rs m 378,473 399,918 5.7
Total Assets Rs m 642,409 717,390 11.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



ITC Cash Flow Statement Analysis

  • ITC's cash flow from operating activities (CFO) during FY19 stood at Rs 126 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -55 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -69 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 2 billion from the Rs -2 billion net cash flows seen during FY18.

ITC Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 131,694 125,834 -4.4%
Cash Flow from Investing Activities Rs m -71,139 -55,457 -
Cash Flow from Financing Activities Rs m -62,211 -68,686 -
Net Cash Flow Rs m -1,656 1,691 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for ITC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 10.5, an improvement from the EPS of Rs 9.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 296.7, stands at 29.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 6.4 times, while the price to sales ratio stands at 7.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 24.9 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 32.1 38.2
TTM Earnings per share Rs 9.4 10.5
Diluted earnings per share Rs 9.3 10.4
Price to Cash Flow x 24.8 24.9
TTM P/E ratio x 28.1 29.3
Price / Book Value ratio x 7.3 6.2
Market Cap Rs m 3,683,256 3,543,970
Dividends per share (Unadj.) Rs 5.2 5.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for ITC

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 3.2x during FY19, from 2.9x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 269.0x during FY19, from 152.3x during FY18. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company declined and down at 22.4% during FY19, from 22.7% during FY19. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company declined and down at 33.6% during FY19, from 34.6% during FY18. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company declined and down at 18.0% during FY19, from 18.1% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 2.9 3.2
Debtors’ Days Days 2 3
Interest coverage x 152.3 269.0
Debt to equity ratio x 0.0 0.0
Return on assets % 18.1 18.0
Return on equity % 22.7 22.4
Return on capital employed % 34.6 33.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how ITC has performed over the last 5 years, please visit here.

ITC Share Price Performance

Over the last one year, ITC share price has moved up from Rs 255.9 to Rs 296.7, registering a gain of Rs 40.8 or around 15.9%.

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for ITC and quarterly results for ITC)

Annual Report FAQs

What is the current share price of ITC?

ITC currently trades at Rs 424.8 per share. You can check out the latest share price performance of ITC here...

What was the revenue of ITC in FY19? How does it compare to earlier years?

The revenues of ITC stood at Rs 490,240 m in FY19, which was up 19.4% compared to Rs 410,460 m reported in FY18.

ITC's revenue has grown from Rs 258,475 m in FY15 to Rs 490,240 m in FY19.

Over the past 5 years, the revenue of ITC has grown at a CAGR of 17.4%.

What was the net profit of ITC in FY19? How does it compare to earlier years?

The net profit of ITC stood at Rs 128,242 m in FY19, which was up 11.7% compared to Rs 114,851 m reported in FY18.

This compares to a net profit of Rs 104,713 m in FY17 and a net profit of Rs 94,924 m in FY16.

Over the past 5 years, ITC net profit has grown at a CAGR of 7.0%.

What does the cash flow statement of ITC reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of ITC reveals:

  • Cash flow from operations decreased in FY19 and stood at Rs 125,834 m as compared to Rs 131,694 m in FY18.
  • Cash flow from investments increased in FY19 and stood at Rs -55,457 m as compared to Rs -71,139 m in FY18.
  • Cash flow from financial activity decreased in FY19 and stood at Rs -68,686 m as compared to Rs -62,211 m in FY18.

Here's the cash flow statement of ITC for the past 5 years.

(Rs m)FY15FY16FY17FY18FY19
From Operations98,43297,990106,273131,694125,834
From Investments-52,754-39,208-32,509-71,139-55,457
From Financial Activity-46,610-56,125-73,010-62,211-68,686
Net Cashflow-9332,658754-1,6561,691

What does the Key Ratio analysis of ITC reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of ITC reveals:

  • Operating profit margins witnessed a fall and stood at 39.3% in FY19 as against 43.1% in FY18.
  • Net profit margins declined from 29.3% in FY18 to 27.4% in FY19.
  • Debt to Equity ratio for FY19 stood at 0.0 as compared to 0.0 in FY18.

Here's the ratio/financial analysis of ITC for the past 5 years.

 FY15FY16FY17FY18FY19
Operating Profit Margin (%)57.762.057.643.139.3
Net Profit Margin (%)39.840.739.029.327.4
Debt to Equity Ratio (x)0.00.00.00.00.0

Read: Latest Annual Report Analysis of ITC

 

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