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ITC 2018-19 Annual Report Analysis

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ITC 2018-19 Annual Report Analysis
Mon, 17 Jun

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 11.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 11.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 38.1% in FY19 as against 38.0% in FY18.
  • Depreciation charges increased by 13.0% and finance costs decreased by 49.5% 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 grew from 25.4% in FY18 to 25.4% in FY19.

ITC Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 434,489 483,527 11.3%
Other income Rs m 18,319 21,738 18.7%
Total Revenues Rs m 452,808 505,265 11.6%
Gross profit Rs m 164,905 184,181 11.7%
Depreciation Rs m 12,363 13,966 13.0%
Interest Rs m 899 454 -49.5%
Profit before tax Rs m 169,962 191,498 12.7%
Tax Rs m 59,164 63,139 6.7%
Profit after tax Rs m 114,927 128,359 11.7%
Gross profit margin % 38.0 38.1
Effective tax rate % 34.8 33.0
Net profit margin % 25.4 25.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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 7% and stood at Rs 235 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 718 billion as against Rs 643 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 525,101 591,409 12.6
 
Current Liabilities Rs m 92,502 100,120 8.2
Long-term Debt Rs m 115 82 -29.1
Total Liabilities Rs m 642,889 717,984 11.7
 
Current assets Rs m 263,936 317,473 20.3
Fixed Assets Rs m 220,323 235,106 6.7
Total Assets Rs m 642,889 717,984 11.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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: Company Reports, Regulatory Filings, 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 276.8, stands at 26.9 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 6.0 times, while the price to sales ratio stands at 7.3 times.
  • The company's price to cash flow (P/CF) ratio stood at 23.6 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 35.6 39.4
TTM Earnings per share Rs 9.4 10.5
Diluted earnings per share Rs 9.5 10.6
Price to Cash Flow x 26.5 23.6
TTM P/E ratio x 27.1 26.9
Price / Book Value ratio x 7.0 6.0
Market Cap Rs m 3,378,147 3,352,480
Dividends per share (Unadj.) Rs 5.2 5.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 422.6x during FY19, from 190.0x 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 21.7% during FY19, from 21.9% 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 32.5% during FY19, from 33.3% 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 17.9% during FY19, from 18.0% 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 23 30
Interest coverage x 190.0 422.6
Debt to equity ratio x 0.0 0.0
Return on assets % 18.0 17.9
Return on equity % 21.9 21.7
Return on capital employed % 33.3 32.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 264.5 to Rs 276.8, registering a gain of Rs 12.3 or around 4.7%.

Overall, the S&P BSE SENSEX is up 10.2% over the year.

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

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