ITC (short for Indian Tobacco Company) is an Indian conglomerate headquartered in Kolkata, West Bengal. It is a diversified company with businesses in the fields of cigarettes, hotels, paperboards & specialty papers, packaging, agri-business, and information technology. ITC’s cigarette business is one of the largest in India, with well-known brands such as Wills and Gold Flake. The company also operates a chain of luxury hotels under the brand name “ITC Hotels”, and is involved in paper manufacturing, packaging, and agribusiness. It is a publicly traded company and is listed on the Bombay Stock Exchange and the National Stock Exchange of India.
ITC share price
ITC Ltd. is a publicly traded company and its shares are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The share price of a company is influenced by a variety of factors, including the company’s financial performance, industry trends, overall market conditions, and investor sentiment.
ITC’s shares have generally performed well over the years. Historically, the company has shown consistent revenue and profit growth, which has helped to boost investor confidence in the stock. The company has consistently paid dividends, which also adds to the attraction for investors. The company also has a good reputation and it is considered a blue-chip stock in Indian stock market.
As shown in the above graph ITC share prices have shown steady growth indicating a strong financial performance of the company, consistent growth and a promising future. ITC share price is on a rapid growth recently. Currently, ITC share prices is at INR 451.60 per share ( as of 25th July, 2023).
Check latest ITC share price here.
History of ITC
ITC was founded in 1910 as the Imperial Tobacco Company of India Limited, and was later rebranded as the Indian Tobacco Company Limited. The company was initially engaged in the trade and export of cigarettes and tobacco products. Over the years, ITC expanded its business interests to include hotels, paperboards and specialty papers, packaging, agri-business, and information technology.
In the 1920s and 1930s, ITC diversified into paper manufacturing, and in the 1940s and 1950s, it established a strong presence in the hotel industry with the acquisition of several properties. In 1975, the company entered the packaged foods market with the launch of its “Aashirvaad” brand of atta (wheat flour).
In the 1990s and 2000s, ITC strengthened its FMCG portfolio by launching several new products and brands in the personal care, foods, and stationery segments. In 2000, the company entered into the agribusiness sector by setting up an integrated supply chain to source agricultural products directly from farmers.
In recent years, ITC has been focusing on growing its “non-cigarettes FMCG” business, with a goal to make it a significant contributor to the company’s overall revenue. It also established a e-Choupal initiative to help its farmers to connect with the company and the market, and improve their livelihood.
Overall, the company has undergone significant changes throughout its history, evolving from a tobacco company to a diversified conglomerate with business interests in several different industries.
Growth of ITC
ITC has grown significantly over the years, both in terms of revenue and market share. The company’s cigarette business has been a major contributor to its growth, with well-known brands such as Wills and Gold Flake. Additionally, ITC’s diversification into other businesses such as hotels, paperboards & specialty papers, packaging, agri-business and information technology has also played a crucial role in its growth.
In terms of revenue, ITC has consistently shown growth over the years. The company’s revenue for the financial year 2020-21 was INR 53,577.72 crore, compared to INR 50,486.15 crore in the previous financial year, registering a growth of 6%. The company’s net profit for the financial year 2020-21 was INR 12,907.53 crore, compared to INR 11,906.07 crore in the previous year, representing a growth of 8%.
In terms of market share, ITC’s cigarette business has a significant share in the Indian market. According to a market research firm, as of 2020, ITC has a market share of 72% of the legal cigarette market in India.
ITC’s Hotels business is also considered one of the best in the country and is known for its luxury offerings and good reputation. The company has been expanding its business in hospitality with addition of more hotels in recent years and strong presence in the Indian market.
ITC’s FMCG business, including Personal Care, Foods and stationery, have also been growing fast and contributing to the revenue. The company’s “e-Choupal” initiative, aimed at providing farmers with direct access to markets and knowledge resources, has helped in increasing agricultural productivity and enhance the livelihood of farmers.
Overall, ITC has grown significantly over the years, and its diversification into various business has helped to insulate it from the fluctuations of any single market, allowing for stable and consistent growth.
Should you invest in ITC shares?
Whether you should invest in ITC will depend on multiple factors that are unique to every investor like risk tolerance, investing goals etc. However, Here are reasons why some people may consider ITC to be a good investment option for the long term:
- Strong financial performance: ITC has a consistent track record of revenue and profit growth, which is a positive sign for investors. The company has been consistently paying dividends to its shareholders which also adds to the attraction.
- Diversified business portfolio: ITC is a diversified conglomerate with business interests in several different industries, including cigarettes, hotels, paperboards and specialty papers, packaging, agri-business, and information technology. This diversification helps to insulate the company from the fluctuations of any single market, which can help to provide stability and consistency for investors.
- Market leadership: ITC has a significant market share in the Indian cigarette market, and it is considered one of the best luxury hotel brand in the country. The company’s FMCG (Fast Moving Consumer Goods) business is also growing fast.
- Strong brand reputation: ITC has a strong reputation for corporate responsibility and sustainable business practices. This can give investors added confidence in the company’s long-term performance.
- Valuations: Generally, ITC shares are considered undervalued and the company’s fundamentals are robust.
On the flip side, there are also some potential risks and concerns that investors should be aware of before investing, these include:
- Dependence on cigarette business: Despite ITC’s diversified portfolio, a significant portion of its revenue still comes from the cigarette business. The Government regulations on cigarettes and tobacco industry are increasing and there is a long-term trend of declining cigarette consumption, which could negatively impact the company’s performance in this segment.
- Political and economic risks: ITC, like any other company operating in India, is subject to the country’s political and economic risks. Economic downturns or changes in government policies could negatively impact the company’s performance.
- Litigation risk: The company is facing some legal challenge on the cigarette business, which could lead to increased regulatory costs and fines.
- Currency Risk: As the company generates a significant portion of its revenue from exports, any fluctuation in the currency exchange rate may impact the company’s revenue and profitability.
- High Valuations: ITC shares are generally considered to be overvalued as compared to its peers and the company’s PE ratio(price to earning ratio) are also on the higher side which gives less room for growth.
It is important to keep in mind that these are only some of the potential risks associated with investing in ITC shares, and it’s always recommended to do your own research, consult with a financial advisor and consider your own risk tolerance and investment goals before making any investment decisions.
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