ITC- Bright Future ahead

Hello guys,

Today's pick is Imperial Tobacco Company which was established in the year 1970 and from 1974 onwards it is called as ITC.

ITC is an Indian Conglomerate firm which has diversified it's fields from Cigarette to a cookie maker

*Chocolates
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Chocolate market is of about 9000 crores in India.
  1. ITC tries to capture 15 to 20% of chocolate market
  2. Let us see how ITC follows it's marketing tricks to strengthen it's portfolios
  3. Intially it launches a product, checks it's response and further moulds the brand with it's varieties and strengthens it's portfolios
  4. ITC entered into chocolate market with a brand called "Candyman"

It has one factory at Bangalore and is aiming to meet 10% of increase in revenue upto next 5 years.

New chocolate manufacturing factory at haridwar is an upcoming one.

*Attas
----------------------------------------------------------
  • On May 2002, ITC entered into the field of Atta with it's Aashirvaad brand.
  •  In short span of time it has become number 1 brand in the country
  •  Later Aashirvaad entered into species segment on 2005 and the brand now has touched upto 4000 crores of market


From the above Graph you can see that

ITC has captured 56% of market eventhough it was started lately around the year 2002.
*Biscuts
----------------------------------------------------------
  • It has entered into biscuts with a brand named "Sunfeast"
  • Sunfeast biscut has entered into 3500 Crore market
  • It is in third position among it's peers and in first position in cream biscut segment. This is as per 10 July 2016. Source: top5ten.com
*Coffee
----------------------------------------------------------
  • It is said that ITC's Sunbean brand can be a good bet for HUL's brand- BRU and Nestle's brand- Nescafe
  • India has 1500 Crore of market in Coffee segment
  • Previously,ITC has been selling Sunbean into it's hotel properties and now it has stepped it's footprint into retail sector
  • Also price of Sunbean is very less when compared with BRU and Nescafe
  • Sunbean is designed with very deep understanding of Indian people coffee drinking habits

*Juice
----------------------------------------------------------
  • On May 29, 2014 ITC has acquired a firm called Natural-B which is of 100 Crore market.
  • ITC has much room for development in this area, since it's peers
  1. Dabur has 54% of market share with it's real fruit juice
  2. PepsiCo occupied 25 to 30% of market share with it's Tropicana
  • ITC is spending more on advertisement for this brand and has increased expenditure upto 60%

*Noodles
----------------------------------------------------------
  • On 2010, ITC has reached 1000 Crore with it's brand called Yippee
  • Top brand is Maggi which was launched by Nestle in the year 1983
  • Nestle acquires 60% of Market Share in Noodles market in India.
  • But one thing you need to make a note that ITC has occupied 7.5% of market share in just 7.5 years which is very fast

*Stationary Market
----------------------------------------------------------
  • India has about 1500 Crore of market in this area.
  • 90% of revenue for ITC in this segment is from a brand called "Classmate"
  • ITC is seeing 4 to 5% of growth every year annually

*Personal care
----------------------------------------------------------
  • Fiama Di Will's was a great successful brand
  • Launch of Vivel has some decreased response from market and ITC overcomed it by remoulding it in the form of Talc, Facewash, Lipbalm and shampoo

*Bingo
----------------------------------------------------------
According to analysts, ITC is eating into the market share of Peosico's Lays who is a market leader and Parle's Musst chips with it's brand called Bingo.

"Many people are crazy on Mad Angles they make"
*Fundamentals
----------------------------------------------------------
BVPS is 43.03x
EPS is 9.20x
ROE is 23.09%
Beta is 1.02
Market Capital is 3640B
Profit Margin is 25.94%
Source : Macroaxis.com

Fundamentals of the stock is looking too good.

*Technicals
----------------------------------------------------------
  1. Strong support level is seen at 265
  2. 288 is an intermediate level
  3. Once it breaks 288 it can go easily upto 304.
  4. Gap between the price variations will be too low since it is a non volatile stock

Short term investors can trade this stock as said in the graph and attain maximum profits.

ITC,Why to buy?
----------------------------------------------------------
  • ITC market strategy and market prediction is very good
  • They come up with 30 to 40 new products every year
  • They are based on the concept like, "Instead of acquiring a big one, it is cost effective to acquire a small one and scale it many times"
  • Initially ITC revenue impacted a lot since their cigarette profit was based on the policy that has been prepared during budget. This was a big headache for ITC to gain profit adhering the policy
  • ITC's footprint into dairy farm adds further revenue

  • Eventhough it is a cigarette bread winner, its good that it is focusing on improving it's revenue on non cigarette business.
*Returns for Long Term Investors
---------------------------------------------------------
  • If ITC goes on same track and if global marketing situations are positive, definitely ITC stock can return a minimum of 400% in next 10 years
Thanks
Keep following this blog for regular updates

Facebook name: Stunner Sudharsun
Facebook page link:
https://www.facebook.com/Concept-Seller-363933557655255/

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