ITC Limited's intrinsic value using Intellectual Capital analysis

ITC Limited

BSE : 500875

|

NSE : ITC

Industry : Cigarettes

|

ISIN : INE154A01025

|

FreeFloat : 70.00%

|

FnO : Yes

|

LotSize : 2400

BSE SENSEX | BSE SENSEX 50 | Nifty 50 | Nifty50 Equal Weight | BSE 100 | BSE 100 Largecap TMC | BSE 200 | BSE 250 LargeMidcap | BSE Largecap | BSE LargeMidcap | Nifty 100 | Nifty 200 | Nifty LargeMidcap 250 | Nifty100 Equal Weight | Nifty Alpha Low Volatility 30 | Nifty Alpha Quality Low Volatility 30 | Nifty Alpha Quality Value Low Voltlty 30 | Nifty Quality Low Volatility 30 | Nifty FMCG | BSE Dividend Stability | Nifty Dividend Opp 50 | Nifty Growth Sectors 15 | Nifty Low Volatility 50 | Nifty100 Low Volatility 30 | Nifty100 Quality 30 | Nifty200 Quality 30 | Nifty50 Value 20 | BSE CARBONEX | BSE GREENEX | BSE Bharat 22 | BSE India Manufacturing | Nifty India Consumption

Intellectual Capital (IC)	86,051.64
Net Worth (NW)	60,496.75
Intrinsic Worth (IW)	146,548.40
Market Cap (MC)	292,160.10
Economic Value Added	2,173.84

Discount Rate	%
Liquidity Premium	%

Knowledge Basis (IC/IW)	58.72%
IC Gross Margin (EBITDA/IC)	25.59%
IC Net Margin (NPT/IC)	17.37%
Knowledge Turnover (Sales/IC)	0.52
Market to Intrinsic Value (MC/IW)	1.99

As Of	Intrinsic Value	Market Price
31 Dec 2019	Rs. 119.23	Rs. 237.70
29 May 2020	-	Rs. 197.35

Fundamental - medium term		Technical - near term		Combined outlook
EVA > 0 : Yes	Buy	10 DMA : Rs. 182.30	Buy	Strong Buy
KB > 50% : Yes		50 DMA : Rs. 172.34
0 < M2IV < 1 : No		Vol-Price trend : Rising

Question 3 - Is this stock undervalued?

Question 2 - Does this business have significant knowledge assets?

Question 1 - Is this business generating enough profits to cover its cost of capital?

* EVA is a registered trademark of Stern Stewart and Co.

Quarterly Results (Rs. Cr)

Quarter

Type*

Sales

Income

EBITDA

EBIT

PBT

PAT

NPT

Mar-17
S
15008.82
15410.92
4277.49
4035.68
4047.14
2669.47
2869.70

Jun-17
S
13800.42
14277.19
4223.17
3954.96
3944.58
2560.50
2717.32

Sep-17
S
9763.92
10258.13
4255.72
3973.30
3944.29
2610.80
2610.80

Dec-17
S
9952.19
10579.11
4944.32
4653.57
4629.55
3090.20
3177.06

Mar-18
S
10813.24
11329.74
4660.51
4356.52
4333.28
2932.71
3100.41

Jun-18
S
10874.59
11278.44
4605.97
4307.28
4299.94
2818.68
2897.10

Sep-18
S
11272.51
11776.63
4710.09
4382.62
4369.12
2954.67
2754.55

Dec-18
S
11431.26
12267.65
5162.16
4826.80
4821.19
3209.07
3637.01

Mar-19
S
12206.03
12946.21
5311.83
4961.65
4953.91
3481.90
3538.22

Jun-19
S
11502.82
12122.99
5185.85
4826.96
4811.74
3173.94
2960.93

Sep-19
S
11871.47
12525.80
5216.70
4821.03
4807.70
4023.10
3979.73

Dec-19
S
12013.01
12996.63
5464.18
5047.97
5035.53
4141.93
3777.71

* C - Consolidated, S - Standalone