Dear Client,

In these uncertain times wherein economy is heading downwards on account of the unprecedented consequences of covid-19 & the subsequent lockdown, its best to stick with companies having resilient balance sheet who can survive this downturn. And the most important criterion is to not over-pay for the stock.

ITC is one such company which fits this criterion. ITC is available at a price/earnings of 15x- the cheapest valued FMCG company in the country. The dividend yield on the stock currently stands at an attractive 3.1%. With zero debt on the balance sheet, operating margins of 41% & a return on capital employed of 34%, it boasts of good fundamentals. It has an 80% market share in legal cigarette industry & has a well established presence with brands such as Aashirvaad, Sunfeast, Bingo in the consumer staples space. With such excellent fundamentals, is the stock poised for a recovery? Check out the video of our research team

For any suggestion or queries, please write to us at equityresearch@prudentcorporate.com

Warm Regards,
Prudent Research Desk