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ITC 2021-22 Annual Report Analysis
Sat, 25 Jun

ITC has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ITC Income Statement Analysis

  • Operating income during the year rose 23.7% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 21.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 36.7% in FY22 as against 37.5% in FY21.
  • Depreciation charges increased by 5.3% and finance costs increased by 3.5% YoY, respectively.
  • Other income declined by 28.2% YoY.
  • Net profit for the year grew by 15.7% YoY.
  • Net profit margins during the year declined from 29.5% in FY21 to 27.6% in FY22.

ITC Income Statement 2021-22

No. of Mths Year Ending 12 Mar-21* 12 Mar-22* % Change
Net Sales Rs m 453,904 561,312 23.7%
Other income Rs m 26,337 18,922 -28.2%
Total Revenues Rs m 480,242 580,235 20.8%
Gross profit Rs m 170,149 206,232 21.2%
Depreciation Rs m 16,456 17,324 5.3%
Interest Rs m 580 600 3.5%
Profit before tax Rs m 179,451 207,230 15.5%
Tax Rs m 45,553 52,373 15.0%
Profit after tax Rs m 133,898 154,857 15.7%
Gross profit margin % 37.5 36.7
Effective tax rate % 25.4 25.3
Net profit margin % 29.5 27.6
* 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 FY22 stood at Rs 122 billion as compared to Rs 107 billion in FY21, thereby witnessing an increase of 13.8%.
  • Long-term debt down at Rs 49 million as compared to Rs 56 million during FY21, a fall of 13.1%.
  • Current assets fell 2% and stood at Rs 342 billion, while fixed assets rose 11% and stood at Rs 430 billion in FY22.
  • Overall, the total assets and liabilities for FY22 stood at Rs 772 billion as against Rs 738 billion during FY21, thereby witnessing a growth of 5%.

ITC Balance Sheet as on March 2022

No. of Mths Year Ending 12 Mar-21* 12 Mar-22* % Change
Networth Rs m 586,408 611,392 4.3
 
Current Liabilities Rs m 106,897 121,637 13.8
Long-term Debt Rs m 56 49 -13.1
Total Liabilities Rs m 737,608 771,960 4.7
 
Current assets Rs m 349,920 342,325 -2.2
Fixed Assets Rs m 387,688 429,636 10.8
Total Assets Rs m 737,608 771,960 4.7
* 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 FY22 stood at Rs 158 billion, an improvement of 25.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY22 stood at Rs -22 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY22 stood at Rs -136 billion, an improvement of 27% on a YoY basis.
  • Overall, net cash flows for the company during FY22 stood at Rs -435 million from the Rs -4 billion net cash flows seen during FY21.

ITC Cash Flow Statement 2021-22

Particulars No. of months 12 12 % Change
Year Ending Mar-21 Mar-22
Cash Flow from Operating Activities Rs m 125,270 157,755 25.9%
Cash Flow from Investing Activities Rs m 56,829 -22,385 -
Cash Flow from Financing Activities Rs m -186,338 -135,805 -
Net Cash Flow Rs m -3,669 -435 -
* 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 12.6, an improvement from the EPS of Rs 10.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 265.8, stands at 21.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 5.4 times, while the price to sales ratio stands at 5.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 16.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-21* 12 Mar-22*
Sales per share (Unadj.) Rs 36.9 45.5
TTM Earnings per share Rs 10.9 12.6
Diluted earnings per share Rs 10.9 12.6
Price to Cash Flow x 17.9 16.6
TTM P/E ratio x 20.1 21.2
Price / Book Value ratio x 4.2 4.7
Market Cap Rs m 2,438,690 2,861,460
Dividends per share (Unadj.) Rs 10.8 11.5
* 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 2.8x during FY22, from 3.3x during FY21. 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 346.4x during FY22, from 310.6x during FY21. 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 improved and stood at 25.3% during FY22, from 22.8% during FY22. 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 improved and stood at 34.0% during FY22, from 30.7% during FY21. 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 improved and stood at 20.1% during FY22, from 18.2% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-21* 12 Mar-22*
Current ratio x 3.3 2.8
Debtors’ Days Days 2 2
Interest coverage x 310.6 346.4
Debt to equity ratio x 0.0 0.0
Return on assets % 18.2 20.1
Return on equity % 22.8 25.3
Return on capital employed % 30.7 34.0
* 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 205.1 to Rs 265.8, registering a gain of Rs 60.8 or around 29.6%.

Overall, the S&P BSE SENSEX is up 0.8% 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 306.3 per share. You can check out the latest share price performance of ITC here...

What was the revenue of ITC in FY22? How does it compare to earlier years?

The revenues of ITC stood at Rs 580,235 m in FY22, which was up 20.8% compared to Rs 480,242 m reported in FY21.

ITC's revenue has grown from Rs 410,460 m in FY18 to Rs 580,235 m in FY22.

Over the past 5 years, the revenue of ITC has grown at a CAGR of 9.0%.

What was the net profit of ITC in FY22? How does it compare to earlier years?

The net profit of ITC stood at Rs 154,857 m in FY22, which was up 15.7% compared to Rs 133,898 m reported in FY21.

This compares to a net profit of Rs 155,846 m in FY20 and a net profit of Rs 128,242 m in FY19.

Over the past 5 years, ITC net profit has grown at a CAGR of 7.8%.

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 increased in FY22 and stood at Rs 157,755 m as compared to Rs 125,270 m in FY21.
  • Cash flow from investments decreased in FY22 and stood at Rs -22,385 m as compared to Rs 56,829 m in FY21.
  • Cash flow from financial activity increased in FY22 and stood at Rs -135,805 m as compared to Rs -186,338 m in FY21.

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

(Rs m)FY18FY19FY20FY21FY22
From Operations131,694125,834146,897125,270157,755
From Investments-71,139-55,457-61,74056,829-22,385
From Financial Activity-62,211-68,686-81,815-186,338-135,805
Net Cashflow-1,6561,6913,342-3,669-435

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 36.7% in FY22 as against 37.5% in FY21.
  • Net profit margins declined from 29.5% in FY21 to 27.6% in FY22.
  • Debt to Equity ratio for FY22 stood at 0.0 as compared to 0.0 in FY21.

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

 FY18FY19FY20FY21FY22
Operating Profit Margin (%)43.139.340.437.536.7
Net Profit Margin (%)29.327.432.929.527.6
Debt to Equity Ratio (x)0.00.00.00.00.0

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