ITC will achieve a turnover of Rs.100,000 crore from new FMCG businesses by 2030. (ITC President FMCG Business Sanjiv Puri, Economic Times 10 March 2015, page 5)
Rs. 1,00,000 cr. = Appx. $16 billion ($1 = Rs. 63)
Company Analysis: ITC
Industry Analysis: Tobacco
Country Analysis: Singapore
Disclaimer
It is a student assignment as part of his learning security analysis. The information is meant for demonstrating the application of textbook principles by learners only. It is not for commercial decision making by investors. Investors are advised to contact and consult registered investment advisors only.
About The Company
1. Chairman: Yogesh Chander Daveshwar.
2. Headquarter: Kolkata, India
3. Employee: 20000
4. Brands: Sunfeast, John Player, Bingo, Wills Life style,
Fiama Di Wills, Di Wills, Paper Kraft, Classmate
About The Business
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
Note: All data in above section referenced at
http://www.itcportal.com/sets/leadership_frameset.htm
http://www.itcportal.com/sets/itc_frameset.htm
Stock
1. Current Share Price (Rs) : 189.90 ( as on 01-05-2009)
2. Market capitalization (Rs) : 71264 Cr
3. 52wk H/L (Rs) : 232.40 – 132.05
4. PE Ratio : 22.84
5. EPS (Rs) : 8.28
6. Face Value (Rs) : 1
Note: All data in above section referenced at
http://money.rediff.com/companies/itc-ltd/12630003
NEWS
1. ITC - FY 09 results by Jun 30, 2009
ITC Ltd has informed BSE that the Company will be submitting its Audited Financial Results within a period of three months from the close of the financial year ended March 31, 2009, and accordingly will not be publishing the Unaudited Financial Results for the fourth quarter ended March 31, 2009.
http://money.rediff.com/companies/news/432715
2. ITC to source more products from Bengal
ITC Ltd plans to source potato and shrimps from West Bengal soon for its e-choupal venture. It also intends to source organic pineapple from North Bengal for its e-choupal model.
The company also intend to set up more Choupal Fresh on a pilot basis in Bengal. Currently they have six Choupal Fresh outlets in Hyderabad and they are piloting it in Chandigarh and Pune. The company currently has 6,500 e-choupals in 10 states. [Business Standard, April 29th.]
4. ITC Infotech featured in ‘2009 Global Services 100’ for five consecutive years
5. Sunfeast World 10K on May 31st '09
Revenue and Profit ( In Cr INR)
Year
Mar ‘ 08
Mar ‘ 07
Mar ‘ 06
Mar ‘ 05
Mar ‘ 04
Sales
13,947.53
12,369.30
9,790.53
7,639.45
6,470.44
Net Profit
3,120.10
2,699.97
2,235.35
2,191.40
1,592.85
ITC will achieve a turnover of Rs.100,000 crore from new FMCG businesses by 2030. (ITC President FMCG Business Sanjiv Puri, Economic Times 10 March 2015, page 5)
Rs. 1,00,000 cr. = Appx. $16 billion ($1 = Rs. 63)
Company Analysis: ITC
Industry Analysis: Tobacco
Country Analysis: Singapore
Disclaimer
About The Company
1. Chairman: Yogesh Chander Daveshwar.
2. Headquarter: Kolkata, India
3. Employee: 20000
4. Brands: Sunfeast, John Player, Bingo, Wills Life style, Fiama Di Wills, Di Wills, Paper Kraft, Classmate
About The Business
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
Note: All data in above section referenced athttp://www.itcportal.com/sets/leadership_frameset.htm
http://www.itcportal.com/sets/itc_frameset.htm
Stock
1. Current Share Price (Rs) : 189.90 ( as on 01-05-2009)
2. Market capitalization (Rs) : 71264 Cr
3. 52wk H/L (Rs) : 232.40 – 132.05
4. PE Ratio : 22.84
5. EPS (Rs) : 8.28
6. Face Value (Rs) : 1
Note: All data in above section referenced at
http://money.rediff.com/companies/itc-ltd/12630003
NEWS
1. ITC - FY 09 results by Jun 30, 2009
ITC Ltd has informed BSE that the Company will be submitting its Audited Financial Results within a period of three months from the close of the financial year ended March 31, 2009, and accordingly will not be publishing the Unaudited Financial Results for the fourth quarter ended March 31, 2009.
http://money.rediff.com/companies/news/432715
2. ITC to source more products from Bengal
ITC Ltd plans to source potato and shrimps from West Bengal soon for its e-choupal venture. It also intends to source organic pineapple from North Bengal for its e-choupal model.
The company also intend to set up more Choupal Fresh on a pilot basis in Bengal. Currently they have six Choupal Fresh outlets in Hyderabad and they are piloting it in Chandigarh and Pune. The company currently has 6,500 e-choupals in 10 states. [Business Standard, April 29th.]
4. ITC Infotech featured in ‘2009 Global Services 100’ for five consecutive years5. Sunfeast World 10K on May 31st '09
Revenue and Profit ( In Cr INR)
Year
|
Mar ‘ 08
|
Mar ‘ 07
|
Mar ‘ 06
|
Mar ‘ 05
|
Mar ‘ 04
|
Sales
|
13,947.53
|
12,369.30
|
9,790.53
|
7,639.45
|
6,470.44
|
Net Profit
|
3,120.10
|
2,699.97
|
2,235.35
|
2,191.40
|
1,592.85
|
Quarter
Dec ‘ 08
Sep ‘ 08
Jun ‘ 08
Mar ‘ 08
Dec‘ 07
Sales
3,858.65
3,862.67
3,899.70
3,934.39
3,457.99
Net Profit
903.21
802.72
748.67
735.64
830.72
Note: All data in above section referenced to key financial at
Analysis
We will analyze the stock price of ITC by various methods.
1. Graham Rao Method (Value Investing):
It is a method of systematic fundamental analysis of the stock of a company by conservative investors based on several parameters. It is useful to identify equity stocks for buy and hold investment. To know more about it, Please visit the following link:
Qualitative Criteria:
1. Adequate Size of the Enterprise: The Company must have a good sales figure and a strong financial condition. The annual sales of the company should be 100 Cr INR for Indian Companies.
2. Dividend Record: The Company should have paid dividend continuously in the last 10 year.
3. Earnings Stability: The Company should have earned profits for the last 10 years.
4. Earnings Growth: The Company should have atleast 10% EPS growth in the last seven years
5. A Sufficiently Strong Financial Condition: The Company should have current assets at least twice current liabilities, i.e. the current ratio of the company should be 2:1.
6. Debt-Equity ratio: The Debt-Equity ratio should not be greater than one.
For ITC the value of the above parameter for the last 10 year is tabulated below:
Year
Annual Sales
(Rs. Cr)
Dividends (%)
PAT(In Cr INR)
Adjusted EPS
Growth (%)
Current Ratio
Debt equity ratio
1999
7599.24
55
623.42
1.69
-----
1.88
0.58
2000
7971.94
75
792.44
2.15
27
1.54
0.24
2001
8699.75
100
1006.26
2.73
27
1.06
0.25
2002
9849.16
135
1189.72
3.20
17
1.2
0.07
2003
11028.41
150
1371.35
3.69
15
1.1
0.02
2004
11819.77
200
1592.85
4.28
16
0.83
0.02
2005
13361.13
310
2191.40
5.84
36
1
0.03
2006
16236.65
265
2235.35
5.94
2
1.32
0.01
2007
19505.06
310
2699.97
7.17
21
1.45
0.02
2008
21467.38
350
3120.10
8.27
15
1.37
0.02
The current price should not exceed 20 times the average EPS in the last seven years for companies with past seven-year growth higher than 20 per cent. For companies with past growth rates between 10 and 20 percent per annum, the multiplier have to be the growth rate itself.
Valuation Criteria
Year
Equity Capital (In Cr INR)
Face Value
Number Of Shares
PAT
(In Cr INR)
EPS
Adjust-ment Factor
Adjusted EPS
1999
245.41
10
245414904
623.42
25.40
0.067
1.69
2000
245.41
10
245414904
792.44
32.29
0.067
2.15
2001
245.41
10
245414904
1006.26
41.00
0.067
2.73
2002
247.51
10
247511886
1189.72
48.07
0.067
3.20
2003
247.59
10
247586073
1371.35
55.39
0.067
3.69
2004
248.10
10
248097657
1592.85
64.20
0.067
4.28
2005
375.51
1
3755136870
2191.40
5.84
1.000
5.84
2006
376.02
1
3760165920
2235.35
5.94
1.000
5.94
2007
376.58
1
3765838830
2699.97
7.17
1.000
7.17
2008
377.15
1
3771510530
3120.10
8.27
1.000
8.27
Bonus announcement:
2005
Jun
1:2
21/09/2005
Face Value Change
2005
1:10
Quarter
|
Dec ‘ 08
|
Sep ‘ 08
|
Jun ‘ 08
|
Mar ‘ 08
|
Dec‘ 07
|
Sales
|
3,858.65
|
3,862.67
|
3,899.70
|
3,934.39
|
3,457.99
|
Net Profit
|
903.21
|
802.72
|
748.67
|
735.64
|
830.72
|
Year
Annual Sales
(Rs. Cr)
Dividends (%)
PAT(In Cr INR)
Adjusted EPS
Growth (%)
Current Ratio
Debt equity ratio
1999
7599.24
55
623.42
1.69
-----
1.88
0.58
2000
7971.94
75
792.44
2.15
27
1.54
0.24
2001
8699.75
100
1006.26
2.73
27
1.06
0.25
2002
9849.16
135
1189.72
3.20
17
1.2
0.07
2003
11028.41
150
1371.35
3.69
15
1.1
0.02
2004
11819.77
200
1592.85
4.28
16
0.83
0.02
2005
13361.13
310
2191.40
5.84
36
1
0.03
2006
16236.65
265
2235.35
5.94
2
1.32
0.01
2007
19505.06
310
2699.97
7.17
21
1.45
0.02
2008
21467.38
350
3120.10
8.27
15
1.37
0.02
Year
Equity Capital (In Cr INR)
Face Value
Number Of Shares
PAT
(In Cr INR)
EPS
Adjust-ment Factor
Adjusted EPS
1999
245.41
10
245414904
623.42
25.40
0.067
1.69
2000
245.41
10
245414904
792.44
32.29
0.067
2.15
2001
245.41
10
245414904
1006.26
41.00
0.067
2.73
2002
247.51
10
247511886
1189.72
48.07
0.067
3.20
2003
247.59
10
247586073
1371.35
55.39
0.067
3.69
2004
248.10
10
248097657
1592.85
64.20
0.067
4.28
2005
375.51
1
3755136870
2191.40
5.84
1.000
5.84
2006
376.02
1
3760165920
2235.35
5.94
1.000
5.94
2007
376.58
1
3765838830
2699.97
7.17
1.000
7.17
2008
377.15
1
3771510530
3120.10
8.27
1.000
8.27
2005
|
Jun
|
1:2
|
21/09/2005
|
2005
|
1:10
|
Seven Year Average Ratio of Average and Initial Growth Fair P/E Fair Price
Note: All data in above section referenced at CMIE Prowess .
2. Dividend Discount Model
Calculation of Beta Value of the stock:
For finding the B- Value of the stock we will take the stock price of the stock and NIFTY for 60 consecutive month ( 1st day of every month).
Month
Nifty
Stock Prices
Market Return
Stock Return
Mar-04
2,230.39
1100
Apr-04
1771.45
1052.9
-20.58
-4.28
May-04
1796.1
1072.1
1.39
1.82
Jun-04
1483.9
890
-17.38
-16.99
Jul-04
1506.65
885.05
1.53
-0.56
Aug-04
1631.55
1037.1
8.29
17.18
Sep-04
1631.7
1050
0.01
1.24
Oct-04
1744.4
1145
6.91
9.05
Nov-04
1787.3
1095
2.46
-4.37
Dec-04
1960.75
1285
9.70
17.35
Jan-05
2080
1318.95
6.08
2.64
Feb-05
2057.75
1331
-1.07
0.91
Mar-05
2103.1
1282.25
2.20
-3.66
Apr-05
2035.9
1335
-3.20
4.11
May-05
1903.1
1440
-6.52
7.87
Jun-05
2087.8
1600
9.71
11.11
Jul-05
2220.45
1650
6.35
3.13
Aug-05
2312.05
1690
4.13
2.42
Sep-05
2384.7
1735
3.14
2.66
Oct-05
2601
136.25
0.00
0.00
Nov-05
2366.8
122.4
-9.00
-10.17
Dec-05
2651.6
135
12.03
10.29
Jan-06
2836.8
142
6.98
5.19
Feb-06
3001.3
155
5.80
9.15
Mar-06
3074.6
172.5
2.44
11.29
Apr-06
3403.15
195.65
10.69
13.42
May-06
3557.55
204.5
4.54
4.52
Jun-06
3072.55
168
-13.63
-17.85
Jul-06
3128.75
183
1.83
8.93
Aug-06
3128.2
167.7
-0.02
-8.36
Sep-06
3414
190.6
9.14
13.66
Oct-06
3588.95
186
5.12
-2.41
Nov-06
3744.1
191
4.32
2.69
Dec-06
3955.7
186
5.65
-2.62
Jan-07
3966.25
176.5
0.27
-5.11
Feb-07
4083.4
173.1
2.95
-1.93
Mar-07
3745.4
172.7
-8.28
-0.23
Apr-07
3820
151.2
1.99
-12.45
May-07
4089.45
161.7
7.05
6.94
Jun-07
4296.05
162.6
5.05
0.56
Jul-07
4318.4
155
0.52
-4.67
Aug-07
4528.85
170.5
4.87
10.00
Sep-07
4466.65
170.65
-1.37
0.09
Oct-07
5021.5
190.75
12.42
11.78
Nov-07
5903.8
180
17.57
-5.64
Dec-07
5765.45
190.9
-2.34
6.06
Jan-08
6136.75
212
6.44
11.05
Feb-08
5140.6
192.25
-16.23
-9.32
Mar-08
5222.8
198.3
1.60
3.15
Apr-08
4735.65
208
-9.33
4.89
May-08
5265.3
222.1
11.18
6.78
Jun-08
4869.25
219.2
-7.52
-1.31
Jul-08
4039.75
186.6
-17.04
-14.87
Aug-08
4331.6
187.05
7.22
0.24
Sep-08
4356.1
188
0.57
0.51
Oct-08
3921.85
190
-9.97
1.06
Nov-08
2885.4
157.65
-26.43
-17.03
Dec-08
2755.15
172.9
-4.51
9.67
Jan-09
2963.3
172.3
7.55
-0.35
Feb-09
2872.35
178.1
-3.07
3.37
Mar-09
2764.6
181.1
-3.75
1.68
Note: All data in above section referenced at
Regression plot of ITC and NIFTY
We have B Value = 0.59
Now,
Calculated growth rate in EPS using 7 year adjusted EPS figures:
Year
Adjusted EPS(Rs.)
% Dividend
Dividend
Adjusted Dividend
1999
1.69
55
5.5
0.275
2000
2.15
75
7.5
0.375
2001
2.73
100
10
0.5
2002
3.2
135
13.5
0.675
2003
3.69
150
15
0.75
2004
4.28
200
20
1
2005
5.84
310
3.1
3.1
2006
5.94
265
2.65
2.65
2007
7.17
310
3.1
3.1
2008
8.27
350
3.5
3.5
Growth
17.54 %
37 %
Average growth = (17.54 + 37)/2 = 27.27 =27(say)
Because of recessionary condition, let us take it to be around 24%
Let us assume that this growth rate will continue for 3 years.
Growth for the next 3 years (3, 4 & 5) will be 75% of 24% = 18 %
Growth for the next 3 years after it (6, 7 & 8) will be 50% of 24% = 12 %
Then the company will grow at the rate of 8% for the next 4 yrs (9, 10, 11 &12)
Then on the company will grow with the mature growth rate = 6 %
(Since the company is in the market leader, Mature growth rate = 6%)
Required rate of return
Risk free rate of return (rf) : 4.6
Market Risk Premium (Mr): 10
B-Value (B) : 0.59
Required Rate(k) = rf + Mr*B = 4.6 + 10* 0.59 = 10.5
S.NO
Year
Growth
Dividend
Discounting Factor
Discounted Dividend
0
2008
24
3.5
1
1
2009
24
4.34
0.9
3.906
2
2010
24
5.38
0.82
4.4116
3
2011
18
6.35
0.74
4.699
4
2012
18
7.49
0.67
5.0183
5
2013
18
8.84
0.61
5.3924
6
2014
12
9.9
0.55
5.445
7
2015
12
11.09
0.5
5.545
8
2016
12
12.42
0.45
5.589
9
2017
8
13.41
0.41
5.4981
10
2018
8
14.48
0.37
5.3576
11
2019
8
15.64
0.33
5.1612
12
2020
8
16.89
0.3
5.067
13
2021
6
397.85
0.27
107.4195
Total
168.5097
The column 13 in the above table contains the value of the stock in the year 13 when it will grow at the mature rate of 6% for the rest of its life.
Conclusion
So we have seen that the intrinsic value of ITC stock is:
1. Graham Rao Method: Rs 96.19
2. Dividend Discount Model: Rs 168.5
However the current market price of the stock is Rs. 189
Note: All data in above section referenced at CMIE PROWESS.
Month
|
Nifty
|
Stock Prices
|
Market Return
|
Stock Return
|
Mar-04
|
2,230.39
|
1100
|
||
Apr-04
|
1771.45
|
1052.9
|
-20.58
|
-4.28
|
May-04
|
1796.1
|
1072.1
|
1.39
|
1.82
|
Jun-04
|
1483.9
|
890
|
-17.38
|
-16.99
|
Jul-04
|
1506.65
|
885.05
|
1.53
|
-0.56
|
Aug-04
|
1631.55
|
1037.1
|
8.29
|
17.18
|
Sep-04
|
1631.7
|
1050
|
0.01
|
1.24
|
Oct-04
|
1744.4
|
1145
|
6.91
|
9.05
|
Nov-04
|
1787.3
|
1095
|
2.46
|
-4.37
|
Dec-04
|
1960.75
|
1285
|
9.70
|
17.35
|
Jan-05
|
2080
|
1318.95
|
6.08
|
2.64
|
Feb-05
|
2057.75
|
1331
|
-1.07
|
0.91
|
Mar-05
|
2103.1
|
1282.25
|
2.20
|
-3.66
|
Apr-05
|
2035.9
|
1335
|
-3.20
|
4.11
|
May-05
|
1903.1
|
1440
|
-6.52
|
7.87
|
Jun-05
|
2087.8
|
1600
|
9.71
|
11.11
|
Jul-05
|
2220.45
|
1650
|
6.35
|
3.13
|
Aug-05
|
2312.05
|
1690
|
4.13
|
2.42
|
Sep-05
|
2384.7
|
1735
|
3.14
|
2.66
|
Oct-05
|
2601
|
136.25
|
0.00
|
0.00
|
Nov-05
|
2366.8
|
122.4
|
-9.00
|
-10.17
|
Dec-05
|
2651.6
|
135
|
12.03
|
10.29
|
Jan-06
|
2836.8
|
142
|
6.98
|
5.19
|
Feb-06
|
3001.3
|
155
|
5.80
|
9.15
|
Mar-06
|
3074.6
|
172.5
|
2.44
|
11.29
|
Apr-06
|
3403.15
|
195.65
|
10.69
|
13.42
|
May-06
|
3557.55
|
204.5
|
4.54
|
4.52
|
Jun-06
|
3072.55
|
168
|
-13.63
|
-17.85
|
Jul-06
|
3128.75
|
183
|
1.83
|
8.93
|
Aug-06
|
3128.2
|
167.7
|
-0.02
|
-8.36
|
Sep-06
|
3414
|
190.6
|
9.14
|
13.66
|
Oct-06
|
3588.95
|
186
|
5.12
|
-2.41
|
Nov-06
|
3744.1
|
191
|
4.32
|
2.69
|
Dec-06
|
3955.7
|
186
|
5.65
|
-2.62
|
Jan-07
|
3966.25
|
176.5
|
0.27
|
-5.11
|
Feb-07
|
4083.4
|
173.1
|
2.95
|
-1.93
|
Mar-07
|
3745.4
|
172.7
|
-8.28
|
-0.23
|
Apr-07
|
3820
|
151.2
|
1.99
|
-12.45
|
May-07
|
4089.45
|
161.7
|
7.05
|
6.94
|
Jun-07
|
4296.05
|
162.6
|
5.05
|
0.56
|
Jul-07
|
4318.4
|
155
|
0.52
|
-4.67
|
Aug-07
|
4528.85
|
170.5
|
4.87
|
10.00
|
Sep-07
|
4466.65
|
170.65
|
-1.37
|
0.09
|
Oct-07
|
5021.5
|
190.75
|
12.42
|
11.78
|
Nov-07
|
5903.8
|
180
|
17.57
|
-5.64
|
Dec-07
|
5765.45
|
190.9
|
-2.34
|
6.06
|
Jan-08
|
6136.75
|
212
|
6.44
|
11.05
|
Feb-08
|
5140.6
|
192.25
|
-16.23
|
-9.32
|
Mar-08
|
5222.8
|
198.3
|
1.60
|
3.15
|
Apr-08
|
4735.65
|
208
|
-9.33
|
4.89
|
May-08
|
5265.3
|
222.1
|
11.18
|
6.78
|
Jun-08
|
4869.25
|
219.2
|
-7.52
|
-1.31
|
Jul-08
|
4039.75
|
186.6
|
-17.04
|
-14.87
|
Aug-08
|
4331.6
|
187.05
|
7.22
|
0.24
|
Sep-08
|
4356.1
|
188
|
0.57
|
0.51
|
Oct-08
|
3921.85
|
190
|
-9.97
|
1.06
|
Nov-08
|
2885.4
|
157.65
|
-26.43
|
-17.03
|
Dec-08
|
2755.15
|
172.9
|
-4.51
|
9.67
|
Jan-09
|
2963.3
|
172.3
|
7.55
|
-0.35
|
Feb-09
|
2872.35
|
178.1
|
-3.07
|
3.37
|
Mar-09
|
2764.6
|
181.1
|
-3.75
|
1.68
|
Note: All data in above section referenced at
|
| Regression plot of ITC and NIFTY We have B Value = 0.59 |
Calculated growth rate in EPS using 7 year adjusted EPS figures:
Year
|
Adjusted EPS(Rs.)
|
% Dividend
|
Dividend
|
Adjusted Dividend
|
1999
|
1.69
|
55
|
5.5
|
0.275
|
2000
|
2.15
|
75
|
7.5
|
0.375
|
2001
|
2.73
|
100
|
10
|
0.5
|
2002
|
3.2
|
135
|
13.5
|
0.675
|
2003
|
3.69
|
150
|
15
|
0.75
|
2004
|
4.28
|
200
|
20
|
1
|
2005
|
5.84
|
310
|
3.1
|
3.1
|
2006
|
5.94
|
265
|
2.65
|
2.65
|
2007
|
7.17
|
310
|
3.1
|
3.1
|
2008
|
8.27
|
350
|
3.5
|
3.5
|
Growth
|
17.54 %
|
37 %
|
Because of recessionary condition, let us take it to be around 24%
Let us assume that this growth rate will continue for 3 years.
Growth for the next 3 years (3, 4 & 5) will be 75% of 24% = 18 %
Growth for the next 3 years after it (6, 7 & 8) will be 50% of 24% = 12 %
Then the company will grow at the rate of 8% for the next 4 yrs (9, 10, 11 &12)
Then on the company will grow with the mature growth rate = 6 %
(Since the company is in the market leader, Mature growth rate = 6%)
Required rate of return
Risk free rate of return (rf) : 4.6
Market Risk Premium (Mr): 10
B-Value (B) : 0.59
Required Rate(k) = rf + Mr*B = 4.6 + 10* 0.59 = 10.5
S.NO
|
Year
|
Growth
|
Dividend
|
Discounting Factor
|
Discounted Dividend
|
|
0
|
2008
|
24
|
3.5
|
1
|
||
1
|
2009
|
24
|
4.34
|
0.9
|
3.906
|
|
2
|
2010
|
24
|
5.38
|
0.82
|
4.4116
|
|
3
|
2011
|
18
|
6.35
|
0.74
|
4.699
|
|
4
|
2012
|
18
|
7.49
|
0.67
|
5.0183
|
|
5
|
2013
|
18
|
8.84
|
0.61
|
5.3924
|
|
6
|
2014
|
12
|
9.9
|
0.55
|
5.445
|
|
7
|
2015
|
12
|
11.09
|
0.5
|
5.545
|
|
8
|
2016
|
12
|
12.42
|
0.45
|
5.589
|
|
9
|
2017
|
8
|
13.41
|
0.41
|
5.4981
|
|
10
|
2018
|
8
|
14.48
|
0.37
|
5.3576
|
|
11
|
2019
|
8
|
15.64
|
0.33
|
5.1612
|
|
12
|
2020
|
8
|
16.89
|
0.3
|
5.067
|
|
13
|
2021
|
6
|
397.85
|
0.27
|
107.4195
|
|
Total
|
168.5097
|
|||||
Conclusion
So we have seen that the intrinsic value of ITC stock is:
1. Graham Rao Method: Rs 96.19
2. Dividend Discount Model: Rs 168.5
However the current market price of the stock is Rs. 189
Note: All data in above section referenced at CMIE PROWESS.
http://knol.google.com/ k/ itc-ltd, Knol Number 628.
Updated 10 March 2015, 8 March 2012
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