ITC Ltd.
ISIN: INE154A01025 • Market Cap: ₹3.34 Lakh Cr
The 5-Pillar Quality Audit for ITC Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (26.7%), Return on Capital Employed (36.4%), and equity compounding (28.5%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.03 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (12.3%) and 3Y PAT CAGR (-1.1%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 16.86 vs PEG of 1.72 and Dividend Yield of 5.4%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at —, backed by 83.4% institutional ownership.
Key Fundamental Strengths
Superior Capital Efficiency (ROCE: 36.4%)
ITC Ltd. generates exceptional return on capital employed of 36.4%, reflecting pricing power and competitive moat.
Robust Equity Compounding (ROE: 28.5%)
Shareholder equity compounds at a healthy 28.5%, exceeding average Indian equity benchmarks.
Fortress Balance Sheet (D/E: 0.03)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
Attractive Valuation Margin (P/E: 16.86)
Trading at a P/E multiple of 16.86, the stock offers a favourable risk-reward entry for quality compounding.
Deep Institutional Sponsorship (83.4%)
Mutual funds, domestic DIIs, and foreign FIIs hold 83.4%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Sectoral & Macro Headwinds (Fast Moving Consumer Goods)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Fast Moving Consumer Goods space.
Quantitative Strategy Eligibility
Checking ITC against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Passes Saurabh Mukherjea's Coffee Can rule: 10%+ sustained revenue growth and 15%+ ROCE/ROE.
Quality Factor Screener (High RoIC + Low Debt)
Qualifies for Indian Quality Indices with overall score of 81/100 and clean gearing.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Fast Moving Consumer Goods Sector Peer Comparison
Compare ITC directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| ITC Ltd. (ITC)Current | 81/100 | ₹3.34 Lakh Cr | 16.86 | 36.4% | 0.03 | — |
| Hindustan Unilever Ltd. (HINDUNILVR) | 75/100 | ₹4.74 Lakh Cr | 31.67 | 22.6% | 0.00 | View |
| Nestle India Ltd. (NESTLEIND) | 68/100 | ₹2.83 Lakh Cr | 74.37 | 57.2% | 0.00 | View |
| Varun Beverages Ltd. (VBL) | 75/100 | ₹1.46 Lakh Cr | 43.23 | 19.6% | 0.10 | View |
| Britannia Industries Ltd. (BRITANNIA) | 74/100 | ₹1.30 Lakh Cr | 50.04 | 62.3% | 0.27 | View |
| United Spirits Ltd. (UNITDSPR) | 77/100 | ₹1.11 Lakh Cr | 58.68 | 26.4% | 0.00 | View |
Frequently Asked Questions: ITC Ltd.
Q:What is the 5-Pillar Fundamental Score for ITC Ltd. (ITC)?
ITC Ltd. has a RupeeTools Fundamental Score of 81/100, placing it in the 'Exceptional Quality' category. Its pillar scores are: Profitability (99/100), Financial Health (87/100), Growth (42/100), Valuation (78/100), and Ownership Quality (95/100).
Q:Is ITC fundamentally strong for long-term investment?
Yes, ITC exhibits solid fundamental strength with a 81/100 score, driven by a return on equity of 28.5% and a debt-to-equity ratio of 0.03.
Q:Does ITC pass the Coffee Can Investing filter?
Yes! ITC satisfies both core pillars of Coffee Can Investing: achieving consistently high capital returns (ROCE/ROE >= 15%) alongside double-digit multi-year revenue growth.
Q:How does ITC compare against other Fast Moving Consumer Goods peers?
Within India's Fast Moving Consumer Goods sector, ITC trades at a P/E of 16.86 and generates an ROCE of 36.4%. Compare its 5-Pillar score of 81/100 against top sector peers like Hindustan Unilever Ltd. (75/100), Nestle India Ltd. (68/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.