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ITC Ltd – ₹5 Lakh Crore Giant That Runs on Cigarettes, Snacks & Samosas

1. At a Glance

ITC is that family uncle who smokes like a chimney but still lectures you on healthy eating. Market cap: ₹5.1 lakh crore. Revenues: ₹79,000 crore. Profits: ₹20,000 crore. Dominates cigarettes (80% market share), yet also sells atta, biscuits, shampoos, agarbattis, hotels, and now even baby wipes. P/E at 25× and dividend yield at 3.5% — basically, a PSU-style payout with FMCG-style valuation.

2. Introduction

Founded in 1910 as Imperial Tobacco, ITC has aged better than most Bollywood actors. While peers like HUL talk about “purpose-led brands” and “sustainability,” ITC sells Classic Milds and Bingo chips with equal swag.

Cigarettes contribute 42% of revenues but 78% of profits — the definition of a “sin stock.” Every budget season, investors sweat over cigarette taxes like students waiting for exam results. Yet, volumes keep growing because — let’s be honest — Gold Flake has more brand loyalty than half of Nifty50 companies.

Meanwhile, ITC has built a respectable FMCG portfolio (Aashirvaad, Sunfeast, Bingo, Fiama, YiPPee). Its food brands reach 25 crore households — basically half of India eats ITC. Add Agri exports, Paperboards, Hotels (recently demerged into ITC Hotels Ltd), and ITC Infotech, and you’ve got a conglomerate so diversified it makes Reliance look like a mono-brand startup.

Question: Do you buy ITC for cigarettes (the profit engine), FMCG (the growth story), or the dividends (the sugar rush)?

3. Business Model – WTF Do They Even Do?

Cigarettes (42% revenue, 78% profit): 80% market share, iconic brands like Gold Flake and Classic. Grew 7% YoY in Q2 FY25. Stable tax regime = smokers keep puffing, investors keep smiling.
FMCG Others (26% revenue): Aashirvaad atta, Sunfeast biscuits, YiPPee noodles, Fiama shampoos, Mangaldeep agarbattis. 25 mother brands, 25 crore households. Grew 5% YoY in Q2 FY25.
Agri Business (17% revenue): Leaf tobacco, spices, marine products. ₹3 MnT handled across 22 states. Shot up 47% YoY in Q2 FY25 thanks to exports.
Paperboards & Packaging (6% revenue): India’s largest paper & packaging firm. Growth muted (2% YoY) because of Chinese dumping.
Hotels (4% revenue): 130+ hotels, 12,000 rooms, 28 more coming. Demerged into ITC Hotels Ltd in Jan 2024.
ITC Infotech (5% revenue): IT services arm. Acquired Blazeclan in 2024. Small but growing.

In short, ITC sells everything from cigarettes to cookies, shampoo to stationery, hotels to hosting solutions. A conglomerate that’s basically India’s mini Berkshire Hathaway — except Warren Buffett quit smoking.

4. Financials Overview

Source table

Metric	Latest Qtr (Jun’25)	YoY Qtr (Jun’24)	Prev Qtr (Mar’25)	YoY %	QoQ %
Revenue	₹21,495 Cr	₹17,778 Cr	₹18,765 Cr	+20.9%	+14.5%
EBITDA	₹6,816 Cr	₹6,545 Cr	₹6,519 Cr	+4.1%	+4.6%
PAT	₹5,343 Cr	₹5,177 Cr	₹5,013 Cr	+3.2%	+6.6%
EPS (₹)	4.2	4.1	3.9	+3.2%	+7.7%

Commentary: Revenues zoom thanks to Agri exports, but PAT barely moved — ITC is that kid who scores 95 in attendance but 60 in marks.

5. Valuation – Fair Value Range Only

P/E Method: EPS ~₹28 × 20–28× → ₹560–780.
EV/EBITDA: EBITDA ~₹29,000 Cr × 16–18× → ₹465–525.
DCF: Growth 8%, WACC 11%, g = 4% → ₹480–650.

🎯 Fair Value Range: ₹465–700.

Disclaimer: This is for education, not a stock tip. Light your cigarettes, not your portfolio.

6. What’s Cooking – News, Triggers, Drama

Hotels Demerger: ITC Hotels listed separately by Feb 2025. Value unlocking, or just a spin-off so investors stop cribbing?
Acquisitions: Mother Sparsh (baby care), Ample Foods, 24 Mantra Organic. ITC is buying startups like a VC firm with deep pockets.
Agri Spike: Export boom

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