It cfinal

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ITC LimitedITC LimitedOne of India’s Most Valuable One of India’s Most Valuable

CorporationsCorporations

PRESENTED BY

DEVKINANDAN PUROHIT – 15

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One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004

Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 19 bln. & are

rated as the ‘most attractive companies for investors’

Only Indian FMCG Company to feature in Forbes 2000 List

A comprehensive ranking of world’s biggest companies measured by a composite of

sales, profits, assets & market value

Among top in :

Sustained value creation (BT-Stern Stewart survey)

Operating profits

Cash Profits

Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09)

No. 1 in FMCG Sector

Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey

2006)

ITC One of India’s most valuable corporations

Honours & AWARDS

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Strategy of Organisation to manage diversity of Portfolio

Formal 3-tiered governance structure: Board of Directors :

Comprising executive (4) and non-executive directors (11) Strategic supervision

Corporate Management Committee : Comprising executive directors and senior managers Strategic management

Divisional Chief Executive & Divisional Management Committee : Executive management

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Sustain multiple drivers of growth, matching internal capabilities

with emerging market opportunities

Pursue World class competitiveness in all businesses and across

the entire value chain

Best-in-class in terms of:

Internal Vitality

Market Standing

Profitability

Strategy of Organisation and Governance processes geared to

manage multiple businesses

Blend core competencies and leverage ITC umbrella strengths to

create new avenues of growth

Corporate Strategies

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ITC - Business Portfolio

ITC

Business Analysis

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58%A

10%E

16%D

11%C

5%B

Segment Revenue FY08

59%A

11%E

14%D

12%B

4%A

Segment Revenue FY09

A. Cigarette B. Hotel C. Other FMCG D. Agri E. Paper

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FMCG - Cigarettes

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Market leadership

Powerful brands across segments

Leadership in all segments - geographic & price

Extensive FMCG distribution network

Direct servicing of 1,00,000 markets & 2 million retail outlets

World-class state-of-the-art technology and products

Investment - Rs.10 billion in six years

Exciting long term growth potential

ITC’s Cigarettes BusinessITC’s Cigarettes Business

Cigarette Brands from ITC.

Gold Flake, Wills, Classic, Insignia India Kings, Silk Cut, Navy Cut Capstan, Scissors Berkeley, Bristol and Flake.

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Cigarettes account for only 15% of tobacco consumed in India

unlike world pattern of 85% due to prolonged punitive taxation

Cigarettes (15% of tobacco consumption) contribute nearly 85% of

Revenue to the Exchequer from tobacco sector

Of the 58% of adult Indian males who consume tobacco, barely

15% can afford cigarettes

Future growth depends on relative rates of growth of per capita

income and moderation in taxes

Cigarettes: Growth potential

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Competitive context

• Competition including international majors becoming more active

• Domestic illegal volumes still very strong. Along with smuggled

contraband, emerges as substantive segment

Regulatory & Taxation

• Pictorial Graphic warnings in place w.e.f. June 09.

• VAT hikes in Maharashtra, Delhi & Rajasthan - threatening the concept of

the ‘Indian Common Market’.

Cigarettes: Challenges

Contribution Of Revenues From Cigarettes

Cigarette Tax Structure

Other FMCG from ITC

Ready to Eat Foods : Kitchens of IndiaStaples : Aashirwaad Atta

Confectionery : mint-o Fresh & CandymanSnack Foods : Sunfeast Biscuits,

Sunfeast Pasta Treat, BINGO!

ITC HOTEL BUSINESS

“Hotels posted impressive

performance during the year withsegment revenues growing by

26%”.

Second Largest Hotel Chain in India – Presence acrossSegments

The ITC Welcomgroup has a presence in the premium, budget and heritage segments, either directly or through subsidiary and joint ventures.

Five catagories of hotel

– ITC Luxury collectionFortune Hotels

– ITCWelcomGroup Sheraton

– WelcomHotel

– Fortune

– WelcomHeritage

The hotel business of the company is expected to give a major boost to the earnings of the company on the back of events like CommonWealth Games in 2010 & Cricket World Cup in 2011. We believe going forward, the hotel business will improve margins.

'Hotel Industry in India' seconds only to China in Asia Pacific

'India Hotel Industry' is adding about 60,000 quality rooms, currently in different stages of planning and development and should be ready by 2012.

Government has approved 300 hotel projects, nearly half of which are in the luxury range

Performance Indicators:

Source:HVS International

City Exis ting SupplyProposed Supply

Increase over Five years

Active Development of Supply Luxury First Class Mid Market Budget

Agra 1336 670 50% 55% 0.00% 22.40% 77.60% 0.00%

Ahmedabad 675 3664 543% 47% 6.80% 32.00% 36.70% 18.30%

Bangalore 3456 15542 450% 60% 19.40% 31.80% 30.20% 10.80%

Chandigarh 340 1813 533% 54% 15.70% 28.80% 21.10% 34.40%

Chennai 2826 7147 253% 71% 26.80% 31.20% 15.60% 16.50%

Delhi-NCR 9019 22360 248% 51% 25.10% 29.70% 30.90% 10.40%

Goa 2768 3353 121% 42% 35.40% 46.40% 7.20% 11.00%

Hyderabad 2554 8250 323% 64% 35.00% 23.30% 24.10% 24.30%

Jaipur 1556 2937 189% 53% 0.00% 16.50% 52.50% 31.00%

Kolkata 1396 5965 427% 49% 23.40% 30.10% 34.90% 9.20%

Mumbai 8454 10613 126% 62% 30.60% 29.90% 20.50% 10.50%

Pune 1346 8243 612% 66% 22.00% 29.30% 31.40% 25.00%

Other Citie s 11256 23909 212% 60% 2.30% 26.00% 26.00% 30.30%

Total 46982 114466 244% 58% 19.60% 28.80% 29.60% 18.00%

ITC Paper Business

“The superior quality of

ITC’sElemental Chlorine Free

pulp hasenabled expansion of the

market forvalue added

paperboards”

“The superior quality of

ITC’sElemental Chlorine Free

pulp hasenabled expansion of the

market forvalue added

paperboards”

ITC's Paperboards Division is India's largest and most technologically advanced paper and paperboards business

Manufacturing units produce more than 500000 TPA of paper and paperboards that meet stringent quality requirements across the world

Indian Paper Industry

Growth of 10% in per capita consumption of paper over the last one year. Per capita

Paper consumption increased to 8.3 kg as of December 2008 as compared to 7.5 kg during 2007-08, as per estimates of Indian Paper Manufacturers Association (IPMA).

 The Indian paper industry accounts for about 1.6% of the world's production of paper and paperboard

ITC enjoys the 80% market share in the paperboard segment.

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Agri BusinessesAgri Businesses- - Leaf TobaccoLeaf Tobacco

- Agri Commodities- Agri Commodities

ITC’s Agri – business has two key product segments – tobacco and other commodities.

It is one of the largest exporters of Agri products from the country

ITC sources the finest of Indian Feed Ingredients, Food Grains, Edible Nuts, Marine Products, Processed Fruits, Coffee and Spices.

ITC is the largest buyer, processor and exporter of leaf tobaccos in India

ITC`s Agri exports constituted nearly 60% of the foreign exchange earnings of $3.2 billion

Segment wise Revenue

Revenue Break-up of Agri - Business in FY09

21%

16%

11%21%

7%

9%13%

E-CHOUPAL

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E Choupal

• e Choupal is an initiative of ITC Limited to link directly with

rural farmers for agricultural / aquaculture produce like

soybeans, wheat, coffee, and prawns.

• eChoupal was conceived to tackle the challenges posed by the

unique features of Indian agriculture, characterized by

fragmented farms, weak infrastructure and the involvement of

numerous intermediaries.

Long term goal is to use e-choupals as sales points for soya bean oil and a range of other consumer goods.

It began in 2000 with soya farmers in madhya pradesh

Focus is on creating internet access for global market information to guide production and supply decisions.

Currently 5300 e-choupals covering 33000 villages & over 3 million farmers.

• 4 kinds of e-choupals for prawns, coffee, wheat and soya beans

• Focus is on creating internet access for global market

information to guide production and supply decisions.

• Long term goal is to use e-choupals as sales points for soya bean

oil and a range of other consumer goods.

• E-choupals will be targeted to drive their product sales

• E-choupal network is also used to sell ITC and third party

products to the villages.

• E-choupal will soon also provide IT enabled services like

health advisories, education and e-governance.

E-Choupal Supply Chain

Financials Outlook

Company Details

• CMP(7th June 2009) Rs 245• Sector FMCG• BSE Code 500875• NSE Symbol ITC• Market Cap (Rs. cr) 92,879.01• Free Float (%) 48.6%• 52- wk HI/Lo 252/132• Avg. volumes (1Mth) 489579• Face Value Re. 1• Dividend (FY09) 370%• Shares o/s (No.) 377.4 crs.

Shareholding Pattern 31stMarch2009

• Foreign Promoters :- 46.79%

• Institutional (Incl. FII) :- 37.74%

• Corporate Bodies :- 3.48%

• Public &others :- 11.95%

• Government :- 0.04%

Financial Performance

Report

Cigarette Business Revenue

Revenue From FMCG

Revenue From Hotel Business

Revenue From Paper Business

EBIT Break Down

Turnover

Turnover and Tax Paid

How Market Discounts ITC

• Market Cap (In Cr.) :- 92,879.01

• Book Value :- 36.24

• EPS ( F.Y.10) :- 8.88

• Trading Rate :- 245

• Fair Value :- 318.91

• Fair Value = 36.24 * 8.88 = 318.91

Recommendation

• BSE weightage 5.4 %

• i.e If Market Moves Up ITC Supports to market by 5.4 bases point and vice versa.

• Future Value Discounted as per EPS

F.Y 10 36.24 * 11.3 = 318.91

F.Y 11 36.24 * 13.3 = 481.92

Future of ITC

• ITC is that it continues to have elasticity in pricing for some of its cigarette brands(gold flake filter, scissors filter).Next price increase can fetch additional revenue of 100cr!

• VAT IS GOING TO BE REPLACED WITH GST.(Goods & Service Tax) That means no immediate increase in excise duty.

• "Ultimately we hope to see a convergence or a chain link between the farm products and the branded end,"

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