ITC - an investors dilemma.
ITC is a fascinating stock...near 5 year lows...looks very alluring. Let's start with the obvious risks: ESG. Taxes on Tobacco. Diworsified with poor capital allocation,declining roce. May take a few years for FMCG to become a critical size of profits. Illegal Cigarettes which are a growing problem. SUTTI stake overhang. Vaping can disrupt smoking. If Marijuana becomes legal,many smokers may switch. The Borderline: Average growth expected in tobacco revenues. No promoter. Huge cash pile but management has not been able to deploy it effectively. Index stock so ETF's will continue to pour in. The Good: Corporate tax cut beneficiary. Possibility of value unlocking via demerger. ITC choupal-google for more info. Complete Domination:ITC sells 4 out of 5 cigarettes in the country. C igarettes form only 11% of Tobacco consumption and are better than beedi,gutka etc and as affluence goes up value can migrate to cigarettes. Cash Machine. Good divi