Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: form 3cd :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ACCOUNTING STANDARDS :: VAT Audit :: TDS :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: empanelment :: VAT RATES
VAT (Value Added Tax) »
 Cenvat Credit Rules, 2017 III Part
 VAT phased out in TS
 Cenvat Credit Rules, 2017 II Part
 Cenvat Credit Rules, 2017 – Part I
 How much do you know about VAT as a taxpayer?
 New tax structure not higher than VAT
 Cos will be reimbursed for exemptions that currently exist in the VAT regime
 GST will get states more than VAT
 Is it a modified Value Added Tax?
 GST regime: VAT Commissioner and CBEC to work with businesses
 Amendments in the Second Schedule appended to the Act (Delhi Value Added Tax Act, 2004)

Buy ITC; target of Rs 224: R K Global
September, 29th 2011

R K Global is bullish on ITC and has recommended buy rating on the stock with a target of Rs 224 in its September 22, 2011 research report.

ITC, the Govt. of West Bengal has brought tobacco related products like cigarettes, chewing tobacco and cigar under Schedule D** in August FY12. VAT on these products was increased to ~20% effective from Sep1 FY12 from earlier ~13.5%. However, the state could further schedule a higher VAT level up-to ~30% by FY13E if it doesnt meets its VAT collection targets. In the midst of Q1FY12, Tamil Nadu also increased the VAT on cigarette products to ~20% from ~12.5% earlier.

West Bengal and Tamil Nadu are among the key revenue contributors to the companys cigarette business with a contribution of approximately ~8.3% and ~11% respectively. The other key contributors to the companys cigarette business are Andhra Pradesh (~13%), Kerala (~12%), Maharashtra (~9%) and Karnataka (~9%) who had not hiked or just modestly hiked the VAT rate in their respective state budgets. Given WBs & TNs VAT effect on ITCs FMCG-cigarette business revenue, we dont expect any material impact on the companys earnings, considering the ~6.8% average price increase in the cigarette portfolio.

Recently the company hiked the price of its Classic brand of cigarettes by 10%, Gold Flake King (~4%) & Wills Navy Cut (~6.5%). So, in any way, the company has hiked prices to sub-side the VAT. In-fact, we have factored a ~2.5% rise in FY12E FMCG-cigarette revenue. On the other hand, ITC opened its first retail store selling premium cigar brand 'Armenteros' in Delhi as part of its plans to strengthen its presence in the premium tobacco segment. ITCs cigar category is growing at a rate of ~20% PA in the country on the back of increasing disposable incomes and exposure to global lifestyles. 

Hence we evenly maintain our earnings estimates at ~19.6 (earlier ~18.5) over FY12-13E & NPAT at ~20% (earlier ~19%). At CMP the stock trades at a P/E of ~21.1x of its FY13E EPS of Rs 9.0 & P/BV of ~7x of its FY13E BVPS of Rs 27. We reiterate our BUY recommendation on the stock with a revised price target of Rs 224, having a potential upside of ~15.1% factored over FY13E P/E of ~24.8x of its EPS of Rs 9.0, says R K Global research report.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions