ITC Limited: Comprehensive Stock Analysis Report | Scrolls

by KarNivesh | 19 August, 2025

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Overview

ITC Limited, one of India’s oldest and most respected companies, started in 1910 as the Imperial Tobacco Company. Today, it has transformed into a diversified conglomerate with businesses across cigarettes, FMCG (fast-moving consumer goods), hotels, agribusiness, paperboards & packaging, and IT services. Headquartered in Kolkata, ITC is now focusing on reducing its dependence on cigarettes and becoming a strong FMCG player. Under its “ITC Next” strategy, the company has already achieved a revenue mix where non-cigarette businesses contribute 64%, while cigarettes make up 36%. A major recent development is the demerger of ITC’s hotels business, effective January 2025. Shareholders received 1 share of ITC Hotels Ltd. for every 10 ITC shares, while ITC still holds 40% ownership. This move allows both businesses to grow independently. In addition, ITC has announced an ambitious investment plan of ₹20,000 crore over the next 5–6 years to expand manufacturing, including new plants across India.

Financially, ITC has been very strong. Revenue grew from ₹60,081 crore in FY2022 to ₹70,315 crore in FY2024, while net profit rose from ₹15,243 crore to ₹20,459 crore. It maintains one of the best profitability levels in India with very high margins. For example, its operating margin improved to 49% in FY2024, and net profit margin stands at 29.1%. ITC is almost debt-free, with a debt-to-equity ratio of only 0.004, and it even has more cash than debt (₹322 crore in surplus). Earnings Per Share (EPS) grew from ₹12.38 in FY2022 to ₹16.42 in FY2024, showing strong wealth creation for shareholders.

ITC Limited's revenue and net profit growth from 2022 to 2024, showing steady growth in both metrics

From an investor’s perspective, ITC’s valuation is attractive compared to FMCG peers. It trades at a Price-to-Earnings (PE) ratio of around 25x, much lower than Hindustan Unilever (42x) or Nestle India (69x), while offering the highest dividend yield at 3.5%. Its market capitalization stands at about ₹5,08,779 crore, with shares trading near ₹406 (August 2025). Over five years, ITC stock has delivered 87% returns, with a three-year return of 134%.

The company has a unique ownership structure with no promoter holding. Instead, it is majorly owned by institutions like foreign investors (38%), insurance companies (20%), and mutual funds (14%). This reflects high institutional confidence.

Looking ahead, ITC’s growth will be driven by stable cigarette taxation, FMCG margin expansion, rural demand recovery, and its ₹20,000 crore investment plan. Risks include regulatory challenges in tobacco, tough FMCG competition, and ESG (environmental, social, and governance) concerns. However, with strong finances, iconic brands, and a clear strategy, ITC remains one of India’s most attractive long-term investment stories.