Technical & Fundamental View Of FMCG Major ITC

ITC has diversified product portfolio in Branded Packaged Foods, Personal Care, Education and Stationery, Agarbattis & Safety Matches, Lifestyle Retailing, Cigarettes & Cigars, Hotels, Paperboards & Specialty Papers, Packaging, Agri-business & IT.

ITC seeks to be emerge as an engine of growth in the Indian economy through a vibrant portfolio of future-ready businesses that are well poised to serve the emerging needs of  future market. The synergies between ITC’s diverse businesses lend competitive strength to each other. ITC aspires to be a leader in every business segment that it operates in, whilst creating sustained value for all stakeholders.

ITC has made tremendous effort to decrease its dependence on cigarette business. It has been successfully able to mobilise all its funds generated from the business of Tobacco, in other fast-growing sectors like FMCG, Agri- products, and hospitality chains. 

-:Fundamental Analysis :-

 -:Company Snapshot & Brand Strength :-

   1) Runs 13 Business in 5 Segments.

    2) Over 60 New Products launched in 1919-1920

    3)  ITC exports 90 Countries

    4)  40 lacks farmers are involved

    5) ITC’s FMCG products are available in 60 
        lacs retail outlets.

    6) ITC’s FMCG products are  available in  6
         million retail outlets

    7) Aashirvaad is No. 1 in branded Atta

    8) Bingo! Is No. 1 in Bridges segment of Snack
        Foods (No.2 overall in Snacks & Potato 
        Chips) 

     9)  Sunfeast is No. 1 in Cream Biscuits

10) Classmate is No. 1 in Notebooks

11) YiPPee! is No. 2 in Noodles.

12) Fiama is No.2 in Body Wash

13) Mangaldeep is No. 2 in Agarbattis (No. 1 in Dhoop segment)

-:Financial Health:-

-:Sales & Profit Growth:-

• Last 10 Years Compounded Sales Growth 10%
• Last 10 Years Compounded Profit Growth 14%
• Stock is providing a good dividend yield(4.66%)
• Company has been maintaining a healthy dividend payout

-:Free Cash Flow Trend Analysis:-

Free cash flow is the money  which  has left over after it has paid for everything it needs to continue operating—including buildings, Property, plant, equipment, payroll, taxes, and inventory.It is also Called Owner's earnings.

     Year -    2015           2016           2017             2018                2019                 2020

     FCF -   6543 Cr    7451 Cr       7505 Cr       10291 Cr          9414 Cr          12248 Cr            

Over the last 5 years, ITC has maintained free cash flow growth has been 13.36%, vs industry average of 13.93%. This consistent growth of cash flow is very good for company as well as investors.Such cash flow indicates that company has robust potential to grow in future.

-:Liquidity Analysis:-

Over the last 5 years, ITC has maintained free cash flow growth has been 13.36%, vs industry avg of 13.93%
Company has been maintaining a healthy dividend payout

Company is almost debt free (Debt to equity ratio-0.01)

Current Ratio-2.91 (>1.25 is Good) (A liquidity ratio that measures a company's ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations.)

Current Ratio-2 (>1 is Good)( The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets)

So Company has good Liquidity which help company to  survive in adverse time also.

-:Profitability Analysis -

Company is consistently maintaining High Return Of Equity (ROE>15 Very Good) & High Return Of Capital Employed(ROCE>15% is Good) & Good ROA

-:Valuation -

• The Present Price to Earning Ratio(PE ratio) is 14.47 Which is lower than industry average 49.4
• EPS is steadily growing from Rs. 4.30 in 2011 to Rs. 12.31 in 2020

Conclusion : Analyzing all financial data, In respect of long term view ITC is a Very good investment bet & as per my view every investor must consider to include this dark horse in Portfolio.

Technical View

CMP of ITC is Rs. 217.85. ITC Recovers from March low low Rs.135 slowly following the uptrend Channel drawn red line.Now last 6 session price consolidate between Rs.200-220 & preparing to break out the channel.

The One interesting observation to be noted that  Price mostly respects magic lines of green channel of  89 Moving Average, from very beginning of up journey .

In chart, 3 red arrows indicates efficient resistance by channel, 5 blue arrow shows good support zone.

In middle of June '2016 , green arrow shows that after breakout of green channel ,price steadily up move.

Now again that similar situation is arising if  price able to cross the green channel & price sustain above Rs.225,don't miss the opportunity to buy for multibagger return .

Another notable observation is that from January'20 , significant volume increased which never observed earlier. 

So watch out very closely in coming week.

Support =200-204
Resistance =237/276/315/354(Medium to long Target)

Techno-Funda Talk Of Agrochemical Major Rallis India

  

RALLIS INDIA((Cmp Rs. 302.85)

Last 3 session Rallis India decisively crossed 290 resistance level. On 17/7/20  to 09/09/20 this 290 level was strong support .After breakdown on 22/9/20 this 290 zone  became  resistance  & fail to cross this resistance level on  29/09/20 , 7/12/20 &  16/12/20.Finally on 6^th January successfully crossed  Rs. 290 hurdle & crossed the blue coloured downtrend line with significant volume.

RSI 69, in bullish zone. In Macd  bullish crossover done. ADX is  34 (25+ Strong Trend). Bollinger Band expands from Squzee which further confirmed upswing. Buying Range Rs.300 –290. Stop Loss Rs. 280. Target 350 very short time.

Fundamentally also the stock is looking Good :-

 Sales revenue & EPS growth @ 6-7 % Year to year, which is Very steady & healthy

Last few year Share Capital is fixed at 19 cr i.e no dilution of Share. reserves consistently increased year to year.Borrowings are decreasing.

Shareholding Pattern:-FII Increase their stake in Last Sept'20Qtr

• Earnings grew by 30.1% over the past year
• Earnings are forecast to grow 17.83% per year
• Company has reduced debt.
• Company is almost debt free.
• Company is expected to give good quarter
• Company has been maintaining a healthy dividend payout of 30.71%
• Good Entry time to consider, as stock is not in overbought zone
• Last 12 years company never in Loss  & maintains healthy increasing profit from 71 cr To 185 Cr.
•  Good  Promoter holding 50.1%
  
  

  "Wide Diversification only required when investors no not understand what they are doing " -Waren Buffett-