ITC Limited (ITC) AI Stock Analysis

• Market Cap: ₹3.76T
• Dividend Yield: 3.52%
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 25.6
• Beta (1Y): 0.52
• Revenue Growth: 4.55%
• EPS Growth: 70.17%
• Country: IN
• Employees: 37,312
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Tobacco
• EPS (TTM): 4.30
• Shares Outstanding: 12,529,229,500
• 10 Day Avg. Volume: 1,430,220
• 30 Day Avg. Volume: 1,283,198
• PEG Ratio: 0.21
• Price to Book (P/B): 7.26
• Price to Sales (P/S): 6.75
• P/FCF Ratio: 33.14
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹392.50
• Price Target Upside: 12.09% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 16.42
• Revenue Forecast (FY): ₹738.37B

• Rating: 79 Outperform
• Price Target: ₹343.00 ▼(-2.04% Downside)
• Action: Reiterated Date: 10/17/25
• Date: Action: Reiterated 10/17/25

ITC Limited's strong financial performance is the most significant factor driving its overall score, supported by a solid balance sheet and robust cash flow. The valuation is reasonable, offering a good dividend yield. Technical analysis suggests some caution due to short-term price trends, but overall, the stock is well-positioned in the Tobacco industry.

Positive Factors

Balance sheet strength

Extremely low leverage and a high equity ratio provide a durable financial cushion, reducing refinancing and solvency risk. This balance-sheet strength supports sustained dividends, opportunistic M&A or capex, and resilience through industry downturns without stressing cash flows.

Cash generation

Robust and improving free cash flow underpins internal funding for growth, dividends and reinvestment into FMCG and packaging. Reliable FCF reduces dependence on external financing and enables strategic reinvestment which supports long-term competitiveness and capital allocation flexibility.

High margins & revenue growth

Sustained high gross and improving net margins indicate durable pricing power and cost control across core segments. Combined with multi-year revenue growth, this suggests structural profitability advantages that can fund brand investment and offset competitive pressures over the medium term.

Negative Factors

Concentration in cigarettes

A heavy reliance on cigarettes for cash generation concentrates earnings risk in one product category. Structural shifts—volume declines, market share moves or tougher regulation—would disproportionately affect consolidated cash flows and could constrain long-term strategic flexibility.

Regulatory/tax vulnerability

Tobacco's exposure to permanent regulatory and tax escalation is a structural headwind. Policy-driven price increases or stricter restrictions can rapidly compress volume and margins, undermining the predictability of the company's historically steady cash generation over the medium term.

Cyclical hotels segment

The hotels business is capital intensive and tied to travel cycles; downturns can quickly erode returns via lower occupancy and ADRs while fixed costs remain. This cyclical volatility can introduce earnings swings and drag consolidated performance in adverse macro periods.

ITC Limited Business Overview & Revenue Model

Company Description

ITC Limited engages in the fast-moving consumer goods, hotels, paperboards and paper, packaging, agri, and information technology (IT) businesses in India and internationally. It primarily offers cigarettes and cigars; staples, spices, biscuits, confectionery and gums, snacks, noodles and pasta, beverages, dairy, ready to eat meals, chocolate, coffee, and frozen foods; personal care products; notebooks, pens and pencils, geometry boxes, erasers, sharpeners, rulers, wax and plastic crayons, sketch pens, and oil pastels; apparel, safety matches; and incense sticks under various brands. The company also operates approximately 113 hotels under the ITC Hotel, WelcomHotel, Fortune, and WelcomHeritage brands; and Kaya Kalp spas. In addition, it offers virgin, recycled, barrier coated, biodegradable barrier, and graphic boards, as well as specialty papers; and packaging products, such as carton board, flexible, tobacco, and green packaging products; and exports feed ingredients, food grains, marine products, processed fruits, coffee products, leaf tobacco products, and spices. Further, the company offers information technology services for the banking, financial services, consumer goods, manufacturing, travel, hospitality, and healthcare industries. Additionally, it provides property infrastructure and estate maintenance; engineering, procurement, and construction management services; project management consultancy services; business consulting, real estate development, and agro-forestry and other related services; manages and operates golf courses; fabricates and assembles machinery for tube filling; cartooning and wrapping services; conveyor solutions; and produces and commercializes seed potato technology products The company was incorporated in 1910 and is headquartered in Kolkata, India.

How the Company Makes Money

ITC makes money primarily by selling products and services across multiple business segments, with cash flows historically anchored by its cigarettes business and supported by FMCG, hotels, paper & packaging, and agribusiness. 1) Cigarettes (and other tobacco products) - Revenue model: ITC earns revenue from the manufacture and sale of cigarettes under its brand portfolio, selling through a large network of distributors and retail outlets across India. - Earnings drivers: Strong brand franchise, extensive distribution reach, and pricing power (within the constraints of regulation and taxation) typically make this segment a major contributor to operating profit. 2) FMCG (branded consumer goods) - Revenue model: ITC sells branded packaged foods and beverages, personal care, home care, and other consumer products through general trade (kiranas), modern trade, and e-commerce/quick-commerce channels. - Earnings drivers: Volume growth through distribution expansion, product innovation, premiumization in select categories, and marketing-led brand building; margins depend on input costs, competitive intensity, and scale benefits. 3) Hotels - Revenue model: ITC generates revenue from room sales (occupancy and average daily rate), food & beverage services (restaurants, banquets, catering), and other hospitality services (events, conferencing, ancillary services). It may also earn income from management contracts where it operates hotels owned by others. - Earnings drivers: Travel demand, corporate and MICE activity, leisure tourism trends, and brand positioning; profitability is sensitive to utilization, pricing, and operating leverage. 4) Paperboards, Paper and Packaging - Revenue model: ITC produces and sells paperboards, specialty papers, and packaging materials to industrial and consumer-goods customers, including packaging solutions that support both external clients and ITC’s own consumer businesses. - Earnings drivers: Demand from FMCG and other sectors, product mix (value-added boards/specialty papers), capacity utilization, and pulp/energy cost cycles. 5) Agribusiness - Revenue model: ITC earns revenue through procurement, aggregation, processing, and trading/export of agricultural commodities (e.g., grains, oilseeds, spices and other agri-outputs), and by supplying agri-raw materials to domestic and global customers. It also supports farm-to-market linkages and supply-chain services. - Earnings drivers: Volumes handled, commodity price spreads and realization, supply-chain efficiency, and demand from food, feed, and processing industries. Cross-segment factors that support earnings - Distribution and brand architecture: A wide distribution network and recognized brands help drive repeat sales in cigarettes and FMCG. - Integration benefits: Internal demand for packaging/paper and agri inputs can support scale and supply reliability. - Regulation and taxation: Cigarettes are subject to significant excise/GST and regulatory constraints, which materially affect pricing, volumes, and profitability. Significant partnerships: null

ITC Limited Financial Statement Overview

Summary

ITC Limited exhibits strong financial health with excellent profitability, robust revenue growth, and a stable balance sheet. The company demonstrates effective cost management, low leverage, and strong cash flow generation, positioning it well for sustainable growth and financial stability.

Income Statement

ITC Limited shows robust financial performance with strong gross and net profit margins. The gross profit margin is consistently high, indicating effective cost management, with the latest figure at approximately 57.6%. The net profit margin has significantly improved from 21.7% in 2024 to 46.1% in 2025, driven by substantial net income growth. Revenue growth is also notable, with a 7.1% increase from 2024 to 2025, demonstrating a positive trajectory in sales.

Balance Sheet

The balance sheet reflects strong equity with a high equity ratio of 79.5% in 2025, showing financial stability and low leverage. The debt-to-equity ratio remains very low at 0.004, indicating minimal reliance on debt financing. Return on equity has improved to 49.6%, underscoring efficient utilization of shareholders' equity to generate profits.

Cash Flow

ITC Limited has a solid cash flow position with a strong free cash flow to net income ratio, which is above 44.2% for 2025, indicating effective cash generation. The operating cash flow to net income ratio is around 50.7% in 2025, reflecting adequate operational cash flow to support net income. Free cash flow has grown by 12.7% from 2024 to 2025, highlighting an improving liquidity position.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	785.52B	753.23B	679.32B	709.37B	606.68B	492.73B
Gross Profit	417.54B	427.10B	402.53B	410.73B	336.21B	285.69B
EBITDA	270.14B	260.18B	253.73B	255.74B	204.94B	169.58B
Net Income	350.32B	347.47B	204.59B	191.92B	152.43B	131.61B
Balance Sheet
Total Assets	908.03B	880.91B	918.26B	858.83B	772.60B	738.19B
Cash, Cash Equivalents and Short-Term Investments	185.60B	203.00B	198.93B	218.74B	166.94B	192.96B
Total Debt	3.63B	2.85B	3.03B	3.06B	2.50B	2.71B
Total Liabilities	192.08B	176.93B	169.36B	163.44B	144.38B	131.25B
Stockholders Equity	710.72B	700.30B	745.07B	691.55B	624.56B	603.47B
Cash Flow
Free Cash Flow	51.01B	153.48B	136.16B	161.35B	136.34B	106.90B
Operating Cash Flow	61.63B	176.27B	171.79B	188.78B	157.76B	125.27B
Investing Cash Flow	32.79B	-3.96B	15.63B	-57.32B	-22.38B	56.83B
Financing Cash Flow	-95.46B	-170.37B	-185.51B	-130.06B	-135.81B	-186.34B

ITC Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 350.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:ITC, the sentiment is Negative. The current price of 350.15 is above the 20-day moving average (MA) of 311.00, above the 50-day MA of 316.90, and below the 200-day MA of 379.25, indicating a bearish trend. The MACD of -6.12 indicates Positive momentum. The RSI at 35.49 is Neutral, neither overbought nor oversold. The STOCH value of 18.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:ITC.

ITC Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITC	79 Outperform	₹3.76T	25.57	―	3.52%	4.55%	70.17%
GODFRYPHLP	69 Neutral	₹310.50B	31.38	―	1.29%	24.53%	39.08%
VSTIND	69 Neutral	₹36.29B	18.16	―	3.93%	―	―
UBL	65 Neutral	₹414.83B	132.49	―	0.62%	8.08%	-22.42%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
HERITGFOOD	62 Neutral	₹28.71B	30.82	―	0.54%	9.83%	-0.92%
HATSUN	61 Neutral	₹213.38B	89.83	―	0.61%	10.61%	7.97%

ITC Limited Corporate Events

ITC Publishes Notice for NCLT Hearing on Proposed Amalgamation Scheme

ITC Limited has notified the stock exchanges that it has published newspaper advertisements regarding a tribunal-ordered hearing of a company petition on 6 February 2026 before the National Company Law Tribunal, Kolkata Bench. The petition seeks approval of a proposed Scheme of Amalgamation under the Companies Act, 2013, involving the merger of Sresta Natural Bioproducts Private Limited and Wimco Limited into ITC Limited, a move that, once sanctioned, is expected to consolidate these businesses within ITC’s corporate structure and potentially streamline operations and integration of acquired entities.