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HomeCURRENT AFFAIRSBUSINESSITC Stock Surges Over 150% in 3 Years; Is It a Sound...

ITC Stock Surges Over 150% in 3 Years; Is It a Sound Investment Option? Let’s Explore

ITC Stock: A Sound Investment with Strong Fundamentals and Growth Drivers

ITC is one of India’s largest conglomerates, with a presence in a diverse range of industries, including FMCG, hotels, paper, packaging, and agriculture. The company has been a consistent performer over the years, and its stock has delivered impressive returns to investors. With sound financial parameters, is ITC stock worth your investment? Check out the article

Weekly Chart of ITC share

The price of ITC shares has increased from around 170 in 2020 to over 450 in 2023, representing a growth of over 150%.

The ITC weekly chart is in a strong uptrend, making higher highs and higher lows. This is a bullish sign, and it suggests that the stock is likely to continue to rise in the future.

Fundamental Analysis

ITC has a strong financial track record, with a healthy balance sheet and strong cash flow generation. The company is almost debt-free and has a good return on equity (ROE) track record. ITC has also been maintaining a healthy dividend payout of 98%.

Growth Drivers

There are a number of factors that can drive further growth for ITC. First, the company has a strong brand portfolio in the FMCG segment. Its products are well-known and trusted by consumers. Second, ITC is expanding its presence in the e-commerce space. This is a growing channel for FMCG sales, and ITC is well-positioned to capitalize on this trend. Third, ITC is also investing in its hotels business. The Indian tourism industry is expected to grow significantly in the coming years, and ITC is well-positioned to benefit from this growth.

Government Initiatives

The Indian government has taken a number of initiatives to support the growth of the FMCG sector. These initiatives include the Make in India program, the Pradhan Mantri Garib Kalyan Yojana, and the Pradhan Mantri Jan Dhan Yojana. These initiatives have boosted demand for FMCG products, and ITC is well-positioned to benefit from this increased demand.

Impact on Indian Economy

ITC is a major contributor to the Indian economy. Over the last ten years, ITC’s added value has increased steadily at an average annual rate of over 12%, reaching over Rs. 68,000 crores. This amount represents approximately 1.1% of the total value added by the entire Industry sector of the economy.

Quarter 1 FY24 Financial Results

ITC reported strong financial results for the first quarter of FY24. The company’s Gross Revenue grew by 8.9%, EBITDA grew by 9.5%, and profit after tax grew by 10.3%. The company’s FMCG business continued to perform well, with segment revenue growing by 8.3% YoY on a high base. The company’s hotels business also performed well, with segment revenue and PBIT growing by 21% and 50% YoY respectively on a high base.

Key Factors

The following are some of the key factors that make ITC a sound investment:

  • Strong brand portfolio in the FMCG segment
  • Expanding presence in the e-commerce space
  • Investing in the hotels business
  • Beneficiary of government initiatives
  • Major contributor to the Indian economy

For investors seeking potential opportunities within the Indian economy across diverse sectors such as FMCG, Hotels, Paperboards and Packaging, Agri Business, and Information Technology, ITC’s impressive growth and these important reasons make it worth considering. But remember, it’s essential to do your research and consider your financial goals before investing.

Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)

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