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ITC Limited- Q1FY22 Result Analysis - Competitor Analysis Of ITC Ltd | Invest Yadnya

ITC Limited- Q1FY22 Result Analysis

Published on 29 July 2021 Views 135 Comments 0

Introduction:

Cigarette-to-Hotel Conglomerate ITC Limited announced its Quarterly Result for the quarter ended 30th June 2021 on Saturday 24th July 2021. The ITC analysis of  the company in its filings to the stock exchange said “Localised lockdowns and mobility restrictions imposed by states in a bid to contain the sharp increase in daily Covid-19 infections in the second wave rendered the operating environment during the quarter extremely challenging and impacted by strong recovery momentum witnessed in recent quarters.”

Let’s move ahead and have an overview of the Q1FY22 Result along with its detailed analysis.

1) Q1FY22 Result:

  • The Gross Revenue from Sales of Product and Services is Rs. 12,884 in the quarter ended 30th June 2021 against Rs. 9,436 Cr.The ITC fundamental analysis in the quarter ended 30th June 2020 amounting to growth of 36.5% YoY. The ITc company profile Quarter-on-Quarter, the Gross Sales has gone down by -8.1% from Rs. 14,023 Cr. in the quarter ended 31st March 2020.

  • The Revenue from Operations of the business and the fundamental analysis of ITC went up by 36.4% YoY from Rs. 9,502 Cr. The ITC shareholding pattern in Q1FY21 to Rs 12,959 Cr. in Q1FY22. Sequentially, ITC shareholding has also gone down by 8.5% from Rs. 14,157 Cr. in Q4FY21.

  • The EBITDA of the company analysis has increased by 50.8% YoY from Rs. 2,647 Cr. in the Q1FY21 to Rs. 3,992 Cr. The Industry analysis of ITC limited in Q1FY22. Quarter-on-Quarter, the same ITC swot analysis has gone down by 10.75% from Rs 4,473 Cr. in the Q4FY21.

  • The EBITDA of the ITC shareholding fundamental Analysis margin of the company stands at 32.7% in the Q1FY22 against an EBITDA Margin of 30% in Q1FY21, amounting to the expansion of the EBITDA Margin by 270 bps YoY of ITCcompany. Sequentially, the EBITDA of the ITC shareholding pattern margin contracted by 100 bps from 33.7% in Q4FY21.

  • The Profit Before Tax (PBT) of the ITC strategy analysis has also shown positivity yearly which increased by 28.4% from Rs. 3,128 Cr. in Q1FY21 to Rs. 4,015 Cr.The information about ITC company in the Q1FY22. The PBT of the industry analysis and company analysis has decreased by 17.3% QoQ from Rs. 4,854 Cr. in the Q4 FY21.

  • The Net Profit of the swot analysis of  ITC limited has increased by 28.6% YoY from Rs. 2,342.8 Cr. ITC swot analysis 2020  in Q1FY21 to Rs. 3,013.5 Cr. in the Q1FY22. The Net Profit of the ITC swot analysis in Q4FY21 was Rs. 3,748 Cr.

ITC Limited- Q1FY22 Result

Swot analysis of the company ITC Limited- Q1FY22 Result

2) Segment-wise Revenue Growth:

  • ITC operates in 5 major segments- Cigarettes, FMCG- Others, Hotels, Agri-Business, and Papers, Paperboards & Packaging.

  • The Revenue from the Cigarettes business stood at Rs. 5,122 Cr. in Q1FY22 up by 32.9% YoY. Quarter-on-Quarter, the Cigarette revenue went down by 12.6% from Rs. 5,860 Cr. in Q4FY21.

  • The FMCG swot analysis- Others segment has yielded revenue of Rs. 3,726 Cr. to the company in Q1FY22 against Rs. 3,375 Cr. in Q1FY21 amounting to a growth of 10.4% YoY. Sequentially, Itc FMCG revenue from this segment has also gone up by 1% from Rs. 3,688 Cr. in Q4FY21.

  • The swot analysis of ITC hotel Business has recorded significant growth of 463.51% YoY from Rs. 23 Cr. in Q1FY21 to Rs. 127 Cr. in Q1FY22. Sequentially, swot of ITC has gone down by 55.8% from Rs. 288 Cr. in Q4FY21.

  • Another major business segment of the company is Agri-Business recorded revenue of Rs. 4,091 Cr. in Q1FY22 up by 9.2% YoY from Rs. 3,746 Cr. in Q1FY21. The ITC company's future plans in the business segment also recorded positive growth sequentially of Rs. 3,369 Cr. in Q4FY21 i.e., 21.4% growth quarterly as compared to the competitors of ITC. The competitors of ITC company have shown quite a less percentage in growth as  according to the competitor analysis of ITC ltd.

  • The Papers, Paperboards & Packaging segment recorded the revenue of Rs. 1,583 Cr. in the Q1FY22 against Rs. 1,026 Cr. in the Q1FY21 amounting to the growth of 54.2%. Quarter-on-Quarter, the revenue has gone down by 4.4% from Rs. 1,656 Cr. in Q4FY21.

ITC Limited- Q1FY22: Segment-Wise Revenue

3. Segment-Wise EBIT Growth:

The EBIT Growth of ITC Limited according to its Segments are as follows:

ITC Limited- Q1FY22: Segment-Wise EBIT

ITC Limited- Q1FY22: Segment-Wise EBIT

4. Revenue Mix- Q1FY22:

i) FMCG- Cigarettes:

  • The FMCG- Cigarettes segment contributed around 35% of the business in the Q1FY22 against 32% in Q1FY21.

  • The Key Points are:

  • Sequential recovery momentum in the Cigarette segment.

  • Q1 volumes at nearly to Pre-COVID levels.

  • Covid-19 second wave caused disruptions in convenience store operations

ii) FMCG-Others:

  • The FMCG- Others segment contributed 25% of the business in Q1FY22 against 28% in Q1FY21 of the ITC stock advice.

  • The Key Points are:

  • Robust Performance by FMCG-Others segment.

  • Revenue growth of the eic analysis of ITC  is driven by Hygiene Products, Fragrances, Spices, Snacks, Dairy, and Agarbattis.

  • FMCG sales through Ecommerce channels have doubled YoY, contributing 5% of FMCG revenue of the ITC company information.

iii) Hotels:

  • The Hotels segment contributed 1% of the ITC company details in Q1FY22 which was near-zero levels in the same quarter of the last financial year.

  • The Key Points are:

  • Progressive recovery in Hotels witnessed in H2 FY21 with easing of restrictions led by leisure destinations, staycations, and weekend getaways. Later it was impacted by the Covid-19 second wave.

  • Structural Cost Management actions aid in mitigating the impact and knowing about what is company analysis.

iv) Agri-Business:

  • The Agri-Business contribution to the revenue has decreased from 31% in Q1FY21 to 28% in Q1FY22.

  • Key Points are:

  • Strong growth is driven by wheat, rice, and leaf tobacco products.

  • Robust Sourcing Network.

  • Strong growth in external revenue of Agri Businesses

v) Papers, Paperboards & Packaging:

  • This business contributed 11% of the revenue in Q1FY22 against 9% in Q1FY21.

  • The Key Points are:

  • Driven by Value Added Paperboards, Décor Paper, and Carton Packaging.

  • Significant improvement in profitability driven by richer product mix.

  • Higher realization due to surge in global pulp prices and structural cost-saving interventions.

ITC Limited- Q1FY22 Revenue Mix

ITC Limited- Q1FY22 Revenue Mix

5. Revenue Mix Vs. EBIT Mix-  Q1FY22 Vs. Q1FY21

ITC Limited: Revenue Mix Vs. EBIT Mix-  Q1FY22 Vs. Q1FY21

ITC Limited: Revenue Mix Vs. EBIT Mix-  Q1FY22 Vs. Q1FY21

6. Segment-Wise Margin Trend:

  • The Cigarette segment of the company continues to deliver the highest margins among other segments of 62.9% as of Q1FY22.

  • The FMCG Business margin continues to remain in the single-digit at around 8% in Q1FY22.

  • The segment margin of Agri-Business is 4.8% as of 30th June 2021 against 5.6% in Q4FY21.

  • The Paperboards and Packaging business have shown a gradual increase in the margins from 15.6% and 19.5% to 24.8% in Q1FY21, Q4FY21, and Q1FY22 respectively of ITC subsidiaries .

ITC Limited- Segment-wise Margin Trend

ITC Limited- Segment-wise Margin Trend

7. FMCG-Others Network & e-Store:

i) FMCG-Others-Network:

  • Market and outlet coverage is at 1.4x and 1.1x respectively compared to pre‐Covid levels.

  • The Stockist network doubled over the base quarter to target rural markets to drive growth, mitigate the impact of disruptions in the wholesale channel and effectively service emergent demand.

  • Sales in the e‐Commerce channel more than doubled over the same period last year taking its salience to 8% of Segment Revenue during the quarter.

  • The Businesses remained proactively engaged with e‐Commerce platforms with account-specific strategies, SKU assortment, and aligned supply chains to service emergent demand in an efficient manner.

ii) ITC e-Store:

  • ITC e‐store’, the Company’s exclusive D2C platform is now operational in 11 cities.

  • The platform offers consumers on‐demand access to a wide range of the Company’s FMCG products across 45+ categories and over 800 products under one roof.

  • Consumer response has been excellent and the platform has received the highest rating in the ‘Experience Leaders’ quadrant as per the Delivery Delight Survey of Redseer.

  • Recent initiatives include UNNATI (eB2B App) & VIRU (Virtual Salesman App) platforms, which facilitate digital ordering and trade engagement; direct‐to‐consumer e‐Commerce platform (ITC e‐Store); WhatsApp based chatbot (ITC Storelocator) enabling easier access for consumers to ITC products in their vicinity; deployment of innovative delivery models, use of alternate channels (ITC Store‐on‐Wheels) and use of AI/ML for outlet level actionable insights, etc.

8) FMCG-Others Segment: Sustained Improvement in Profitability:

ITC Limited: FMCG-Others Segment: Sustained Improvement in Profitability

ITC Limited: FMCG-Others Segment: Sustained Improvement in Profitability

9) FMCG-Others: Strong Growth Platforms:

ITC Limited owns and continues to gain leadership position in its key brands, the highlights of the same are provided below:

ITC Limited- FMCG-Others: Strong Growth Platforms

10) Agri-Business: Moving-up Value Chain:

  • Strategic focus on rapidly scaling up Value‐Added product portfolio to accelerate growth and enhance value capture.

  • Value Added Spices to Food Safe markets continue to gain traction

  •  The Company’s wholly-owned subsidiary, IIVL^ is progressing construction of a world‐class manufacturing facility at Mysore, for the export of Nicotine & Nicotine derivative products to the US/EU.

ITC Limited- Agri-Business: Moving-up Value Chain

11) Valuations:

  • The ITC stock is trading at a PE ratio of 19.86 as of 26th July 2021 which is trading at fair valuation and following the Median PE of the last1 year, 3 years, and 5 years.

ITC

Current PE Ratio

19.86

Last 1 year Median PE

18.9

Last 3 years Median PE

20

Last 5 years Median PE

29.5


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