Latest Expert Exchange Queries
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: empanelment :: articles on VAT and GST in India :: cpt :: VAT Audit :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT
« VAT (Value Added Tax) »
 Amendments in the second Schedule received from Finance Deptt.
 VAT exemption stays in tax reform bill
 Income Tax Appellate Tribunal Bangalore Banches Bangalore 'A' Bench DB Case Causelist for The Week from 22-05-2017 To 25-05-2017
 Amendments in Second schedule appended to Delhi Value Added Tax Act, 2004
 Haryana govt exempts solar devices from VAT net
 Court rules out VAT on Paradise equity transfer
 VAT gone but riddle of derivatives traded on commodity exchanges lives on
 Rule 2(L) Of Cenvat Credit Rules, 2004 Amended
 Haryana govt exempts solar equipment from VAT
 AP to push for same benefits under GST for VAT exempted goods
 Andhra Pradesh to push for same benefits under GST for VAT exempted goods

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