Had shared my work on another thread on the return sensitivity tables wrt to different growth rates and exit multiples. Excel sheet included in the link above.
How to Read the Table?
For ex., from an entry price of 148, if ITC manages even a 10-year CAGR growth of 7.5% in their PAT and we get an exit multiple of 20 on that 10th year PAT, we should be able to achieve a total CAGR of 15.57% inclusive of dividends. The model has been updated for the recent increase in DPR (Dividend Payout Ratio). One can use the matrix to ascertain worse and best case scenario.
| CAGR Return | |||||||
|---|---|---|---|---|---|---|---|
| Growth/PE | 10 | 15 | 20 | 25 | 30 | 35 | 40 |
| 2.5% | 5.42% | 8.32% | 10.65% | 12.62% | 14.31% | 15.81% | 17.14% |
| 5.0% | 7.59% | 10.65% | 13.10% | 15.14% | 16.91% | 18.46% | 19.85% |
| 7.5% | 9.80% | 13.01% | 15.57% | 17.70% | 19.53% | 21.13% | 22.57% |
| 10.0% | 12.04% | 15.40% | 18.05% | 20.26% | 22.16% | 23.82% | 25.30% |
Also sharing industry data for easy comparison with domestic peers on different parameters. Below excel also includes segmented data for the different business lines of ITC. The chart worksheet has 4 charts, so do remember to scroll down to view all the data. To the right of the chart are their respective slicers which can be used to visualize the various parameters one at a time.
Tobacco Industry.xlsx (274.9 KB)