ITC 2020-21 Annual Report Analysis

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

ITC 2020-21 Annual Report Analysis
Mon, 6 Sep

ITC has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

ITC Income Statement Analysis

  • Operating income during the year fell 4.3% on a year-on-year (YoY) basis.
  • The company's operating profit decreased by 11.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 37.5% in FY21 as against 40.4% in FY20.
  • Depreciation charges increased by 0.0% and finance costs decreased by 28.8% YoY, respectively.
  • Other income grew by 1.3% YoY.
  • Net profit for the year declined by 14.1% YoY.
  • Net profit margins during the year declined from 31.2% in FY20 to 27.9% in FY21.

ITC Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 474,146 453,904 -4.3%
Other income Rs m 26,006 26,337 1.3%
Total Revenues Rs m 500,152 480,242 -4.0%
Gross profit Rs m 191,521 170,149 -11.2%
Depreciation Rs m 16,449 16,456 0.0%
Interest Rs m 814 580 -28.8%
Profit before tax Rs m 200,264 179,451 -10.4%
Tax Rs m 44,418 45,553 2.6%
Profit after tax Rs m 155,846 133,898 -14.1%
Gross profit margin % 40.4 37.5
Effective tax rate % 22.2 25.4
Net profit margin % 31.2 27.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Going LIVE Today at 5pm: The EV Gold Rush Special Event

ITC Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 107 billion as compared to Rs 96 billion in FY20, thereby witnessing an increase of 11.8%.
  • Long-term debt down at Rs 56 million as compared to Rs 59 million during FY20, a fall of 5.4%.
  • Current assets fell 11% and stood at Rs 350 billion, while fixed assets rose 3% and stood at Rs 388 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 738 billion as against Rs 773 billion during FY20, thereby witnessing a fall of 5%.

ITC Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 632,511 586,408 -7.3
 
Current Liabilities Rs m 95,598 106,897 11.8
Long-term Debt Rs m 59 56 -5.4
Total Liabilities Rs m 773,108 737,608 -4.6
 
Current assets Rs m 395,054 349,920 -11.4
Fixed Assets Rs m 378,054 387,688 2.5
Total Assets Rs m 773,108 737,608 -4.6
* 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 FY21 stood at Rs 125 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs 57 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -186 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -4 billion from the Rs 3 billion net cash flows seen during FY20.

ITC Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 146,897 125,271 -14.7%
Cash Flow from Investing Activities Rs m -61,740 56,829 -
Cash Flow from Financing Activities Rs m -81,815 -186,338 -
Net Cash Flow Rs m 3,342 -3,669 -
* 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 10.9, an decline from the EPS of Rs 12.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 209.2, stands at 18.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 4.2 times, while the price to sales ratio stands at 5.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 17.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 38.6 36.9
TTM Earnings per share Rs 12.7 10.9
Diluted earnings per share Rs 12.7 10.9
Price to Cash Flow x 14.9 17.1
TTM P/E ratio x 18.1 18.2
Price / Book Value ratio x 4.3 4.2
Market Cap Rs m 2,570,920 2,574,395
Dividends per share (Unadj.) Rs 10.2 10.8
* 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 deteriorated and stood at 3.3x during FY21, from 4.1x during FY20. 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 310.6x during FY21, from 247.1x during FY20. 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 22.8% during FY21, from 24.6% during FY21. 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 30.7% during FY21, from 31.8% during FY20. 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 18.2% during FY21, from 20.3% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 4.1 3.3
Debtors’ Days Days 2 2
Interest coverage x 247.1 310.6
Debt to equity ratio x 0.0 0.0
Return on assets % 20.3 18.2
Return on equity % 24.6 22.8
Return on capital employed % 31.8 30.7
* 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 186.7 to Rs 209.2, registering a gain of Rs 22.5 or around 12.1%.

Overall, the S&P BSE SENSEX is up 49.2% over the year.

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

Equitymaster requests your view! Post a comment on "ITC 2020-21 Annual Report Analysis". Click here!

  

Related Views on News

ITC Announces Quarterly Results (3QFY21); Net Profit Down 11.6% (Quarterly Result Update)

Feb 12, 2021 | Updated on Feb 12, 2021

For the quarter ended December 2020, ITC has posted a net profit of Rs 37 bn (down 11.6% YoY). Sales on the other hand came in at Rs 125 bn (up 4.0% YoY). Read on for a complete analysis of ITC's quarterly results.

ITC 2019-20 Annual Report Analysis (Annual Result Update)

Dec 1, 2020 | Updated on Dec 1, 2020

Here's an analysis of the annual report of ITC for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of ITC. Also includes updates on the valuation of ITC.

ITC Announces Quarterly Results (2QFY21); Net Profit Down 19.7% (Quarterly Result Update)

Nov 25, 2020 | Updated on Nov 25, 2020

For the quarter ended September 2020, ITC has posted a net profit of Rs 32 bn (down 19.7% YoY). Sales on the other hand came in at Rs 120 bn (up 0.9% YoY). Read on for a complete analysis of ITC's quarterly results.

Burger King IPO: Should You Subscribe to This QSR Chain Business? (IPO)

Dec 2, 2020

Does the company with one of the fastest-growing QSR chains in India have sound prospects?

More Views on News

Most Popular

5 Green Energy Stocks to Watch as India Readies for a Revolution(Views On News)

Oct 13, 2021

The excitement around green energy stocks has opened up a huge contrarian opportunity in the traditional energy space.

Could HDFC Bank be a Big EV Winner? The Answer Will Surprise You...(Profit Hunter)

Oct 13, 2021

Why should investors take it for granted that India's Tesla will be one of the major auto stocks?

Tata Group Stocks are on Fire: Which one Should You Buy?(Profit Hunter)

Oct 15, 2021

Tata group stocks are on fire. Find out which one deserves your attention.

Massive Surge in the Shares of Tata Motors Today. Key Factors Favouring the Rally(Views On News)

Oct 13, 2021

Tata Motors zooms 23% after report of TPG investing Rs 75 bn in EV arm.

India's Big PSU Selloff: Watch Out for these Top Stocks(Views On News)

Oct 15, 2021

The government's plan to divest its stakes in PSUs could spark off a rally in these four stocks.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

TRACK ITC

COMPARE ITC WITH

MARKET STATS