ITC Limited

ITC.BO•tobacco

Current Price

410.20INR

per share

Fair Value

645.55INR

Undervalued

36.5%

Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 14.36%, lower than industry average of 32.17%.

Growth Trajectory

Profitability

In the growth phase company makes 34.92% profit on every dollar of sales, higher than industry average of 31.82%.

Profitability Trajectory

Risk Profile

Investors expect at least 4.81% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)

Return on Invested Capital (%)

Financial Health Overview

Enterprise Value

7.88T INR

Equity Value

8.07T INR

FCF Yield

72.60%

Average ROIC

47.12%

Cost of Capital

6.28%

P/E Ratio

24.53x

Financial Metric	Most Recent 12 months (INR)	Previous Year (INR)
Revenues	791B INR	673.91B INR
Operating Income or EBIT	275.31B INR	265.11B INR
Interest Expense	535.80M INR	391.10M INR
Book Value Of Equity	700.30B INR	745.07B INR
Book Value Of Debt	2.85B INR	3.04B INR
Cash and Marketable Securities	200.35B INR	198.93B INR
Number of Shares Outstanding	12.51B	--
Minority interests	3.83B INR	0 INR
Current Stock Price	410.20 INR	--
Effective Tax Rate	24.00%	--
Marginal Tax Rate	30.00%	--

Performance vs Industry

Revenue Growth

-14.79%

17.37%Company

32.16%Industry

Below Industry

Operating Margin

+2.99%

34.80%Company

31.81%Industry

At Industry Level

ITC Limited performs in line with industry averages, showing balanced competitive positioning within its sector.

Terminal Value Analysis

Growth Rate

4.65%

Cost of Capital

8.88%

Return on Capital

17.76%

Reinvestment Rate

26.18%

Terminal value represents 70% of total enterprise value, based on 4.65% perpetual growth and 8.88% discount rate.

Equity Value Breakdown

Component	Value	Type
Present Value (Terminal Value)	5.48T INR	Add
Present Value (Cash Flow Over Next 10 Years)	2.39T INR	Add
Value of Operating Assets	7.88T INR	Sub-total
Debt	2.84B INR	Subtract
Minority Interests	3.82B INR	Subtract
Cash	200.35B INR	Add
Value of Equity	8.07T INR	Sub-total
Number of Shares	12.51B shares	Divisor
Estimated Value per Share (Fair Value)	645.55 INR	Total
Current Market Price	410.20 INR	Reference

Financial Projections

Total FCF Present Value

2.39T INR

Avg Revenue Growth

9.40%

Avg Operating Margin

34.94%

Avg ROIC

47.12%

Year	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal Year
REVENUE
Revenue	855.46B INR	978.27B INR	1.11T INR	1.27T INR	1.46T INR	1.64T INR	1.81T INR	1.97T INR	2.10T INR	2.19T INR	2.30T INR
Growth Rate	8.14%	14.35%	14.35%	14.35%	14.35%	12.41%	10.47%	8.53%	6.59%	4.65%	4.65%
PROFITABILITY
Operating Income	297.75B INR	341.25B INR	390.68B INR	447.26B INR	512.04B INR	575.60B INR	635.89B INR	690.15B INR	735.64B INR	769.84B INR	805.64B INR
Operating Margin	34.80%	34.88%	34.92%	34.96%	35.00%	35.00%	35.00%	35.00%	35.00%	35.00%	35.00%
EBIT (1-tax)	226.29B INR	259.35B INR	296.91B INR	339.92B INR	389.15B INR	430.55B INR	468.01B INR	499.66B INR	523.77B INR	538.89B INR	563.95B INR
CASH FLOW
Reinvestment	43.82B INR	50.11B INR	57.30B INR	65.53B INR	64.80B INR	99.59B INR	89.63B INR	75.14B INR	56.51B INR	59.13B INR	147.65B INR
Free Cash Flow	182.47B INR	209.24B INR	239.61B INR	274.38B INR	324.34B INR	330.96B INR	378.38B INR	424.52B INR	467.26B INR	479.75B INR	416.29B INR
Terminal Value	--	--	--	--	--	--	--	--	--	--	9.84T INR
Present Value	174.09B INR	190.48B INR	208.12B INR	227.39B INR	256.45B INR	247.76B INR	266.13B INR	278.39B INR	283.55B INR	267.38B INR	—
EFFICIENCY
ROIC	45.00%	47.44%	49.75%	51.97%	54.08%	54.89%	52.94%	51.32%	49.94%	48.75%	17.76%
Cost of Capital	4.80%	4.80%	4.80%	4.80%	4.80%	5.62%	6.43%	7.25%	8.06%	8.88%	8.88%
Sales/Capital	2.80x	2.80x	2.80x	2.80x	2.80x	1.72x	1.72x	1.72x	1.72x	1.72x	—

Profitability & Efficiency

Operating Margin (%)

ROIC (%)

Value Creation Analysis

ROIC (%)

Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (₹B)

Reinvestment (₹B)