The question really is what will re-rate this stock? or what is stopping the stock from rerating.
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Management - no concalls, no accountability, earlier in this thread/on Twitter people have expressed how terrible the AGM was.
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All these small things here and there like frozen foods/sanitizer etc etc are too small to move the needle. ITC is a cigarette company. Period. Investors shouldn’t pretend otherwise.
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We keep talking about ITC being a FMCG giant, margins have continously improved. Stock for the most part has either gone nowhere or down. Meanwhile other FMCG cos multiples are going up like there’s no limit.
People continously complain about the availability of products. -
BAT stake - big question mark - BAT owns 30% of ITC.
As an ITC investor and a BAT investor - I’d prefer ITC starts buying back its stake from BAT, and BAT uses that money to buyback own stock. Win Win for both. -
30k cr on Balance Sheet - Capital Misallocation of the highest order. Tobacco is such a stable business for the most part, they should lever up the balance sheet mildly (1-2x EBITDA) like other tobacco companies globally and increase returns to shareholders.
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Their ESG credentials are great, but nobody cares. They sell Tobacco. Period.
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They pretend like tobacco doesn’t exist - very little/no mention of tobacco in presentations. They should be working with the government to reduce illicit trade, bring in reduced harm products - vaping/heated tobacco/nicotine pouches/snus etc.
VST is buying 5% of shares to issue ESOP to stop losing talent.
Godfrey Philips has a family feud going on.
ITC should be capitalising on this.
- And ofcourse, Price drives perception.
Global tobacco derating since 2017, let’s see how that goes.
P.S. All investors ought to look at how many shares the CEO owns, he’s been at ITC for decades btw. no skin in the game.
As far as I understand they don’t publish how the bonus is decided for management - maybe if ROIC and TSR were in the criteria, things would be different.