ITC 2023-24 Annual Report Analysis

Tue, 2 Jul

ITC has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

ITC Income Statement Analysis

• Operating income during the year fell 0.7% on a year-on-year (YoY) basis.
• The company's operating profit increased by 1.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 40.4% in FY24 as against 39.5% in FY23.
• Depreciation charges increased by 0.4% and finance costs increased by 2.9% YoY, respectively.
• Other income grew by 40.5% YoY.
• Net profit for the year grew by 6.5% YoY.
• Net profit margins during the year grew from 29.8% in FY23 to 32.0% in FY24.

ITC Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	653,555	649,215	-0.7%
Other income	Rs m	19,819	27,838	40.5%
Total Revenues	Rs m	673,374	677,053	0.5%
Gross profit	Rs m	258,200	262,525	1.7%
Depreciation	Rs m	18,090	18,164	0.4%
Interest	Rs m	778	801	2.9%
Profit before tax	Rs m	259,151	271,399	4.7%
Tax	Rs m	64,384	63,885	-0.8%
Profit after tax	Rs m	194,767	207,514	6.5%
Gross profit margin	%	39.5	40.4
Effective tax rate	%	24.8	23.5
Net profit margin	%	29.8	32.0

Don't Miss: Key Information for Long-term Investors

ITC Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 137 billion as compared to Rs 137 billion in FY23, thereby witnessing an decrease of -0.4%.
• Long-term debt down at Rs 18 million as compared to Rs 35 million during FY23, a fall of 49.6%.
• Current assets rose 4% and stood at Rs 411 billion, while fixed assets rose 10% and stood at Rs 507 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 918 billion as against Rs 858 billion during FY23, thereby witnessing a growth of 7%.

ITC Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	684,138	739,994	8.2
Current Liabilities	Rs m	137,394	136,904	-0.4
Long-term Debt	Rs m	35	18	-49.6
Total Liabilities	Rs m	858,310	917,540	6.9
Current assets	Rs m	396,709	410,655	3.5
Fixed Assets	Rs m	461,601	506,884	9.8
Total Assets	Rs m	858,310	917,540	6.9

ITC Cash Flow Statement Analysis

• ITC's cash flow from operating activities (CFO) during FY24 stood at Rs 172 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 16 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -186 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 2 billion from the Rs 1 billion net cash flows seen during FY23.

ITC Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	188,776	171,789	-9.0%
Cash Flow from Investing Activities	Rs m	-57,323	15,628	-
Cash Flow from Financing Activities	Rs m	-130,060	-185,510	-
Net Cash Flow	Rs m	1,392	1,907	36.9%

Current Valuations for ITC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 16.6, an improvement from the EPS of Rs 15.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 428.3, stands at 25.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 7.2 times, while the price to sales ratio stands at 8.2 times.
• The company's price to cash flow (P/CF) ratio stood at 24.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	52.6	52.0
TTM Earnings per share	Rs	15.7	16.6
Diluted earnings per share	Rs	15.6	16.6
Price to Cash Flow	x	22.5	24.3
TTM P/E ratio	x	24.7	25.8
Price / Book Value ratio	x	5.8	7.4
Market Cap	Rs m	3,994,365	5,482,041
Dividends per share (Unadj.)	Rs	15.5	13.8

Ratio Analysis for ITC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.0x during FY24, from 2.9x during FY23. 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 340.0x during FY24, from 334.2x during FY23. 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 declined and down at 28.0% during FY24, from 28.5% during FY24. 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 declined and down at 36.8% during FY24, from 38.0% during FY23. 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 declined and down at 22.7% during FY24, from 22.8% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.9	3.0
Debtors’ Days	Days	2	2
Interest coverage	x	334.2	340.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	22.8	22.7
Return on equity	%	28.5	28.0
Return on capital employed	%	38.0	36.8

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 down from Rs 451.7 to Rs 428.3, registering a loss of Rs 23.4 or around 5.2%.

Overall, the S&P BSE SENSEX is up 24.5% over the year.

(To know more, check out historical annual results for ITC and quarterly results for ITC)