Discounted Cash Flow Calculation for NSEI:INDNIPPON using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
India Nippon Electricals
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
NSEI:INDNIPPON DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
India Nippon Electricals
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
India Nippon Electricals's
is considered below, and whether this is a fair price.
Price based on past earnings
India Nippon Electricals's earnings available for a low price, and how does
this compare to other companies in the same industry?
India Nippon Electricals's earnings are expected to grow by 9.3% yearly, however this is not considered high growth (20% yearly).
India Nippon Electricals's revenue is expected to grow by 11.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
India Nippon Electricals's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
India Nippon Electricals
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
India Nippon Electricals's finances.
The net worth of a company is the difference between its assets and liabilities.
India Nippon Electricals is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
India Nippon Electricals's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
India Nippon Electricals's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
India Nippon Electricals has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
Mr. Ravinder Sharma serves as the Chief Executive Officer of India Nippon Electricals Limited. Mr. Sharma served as the President of Electrical Division at Varroc Engineering Pvt. Ltd. Mr. Sharma joined the Varroc family in September 2011 as Vice President of R&D - Electrical Division. Apart from the remarkable qualifications, his expertise stems from a 28-year experience in the industry, particularly in the R&D domain. He started his career with Eicher Research & Development Centre in the Design & Testing of Light Commercial Vehicles with Mitsubishi Motors. During his tenure at Eicher, he worked for the improvement of structural design of vehicles to suit Indian road conditions. Mr. Sharma joined Denso India Ltd. where he worked for 23 years and served as the General Manager of Product Design and Process Engineering. He got extensive training in Denso Corp. Japan and Thailand in Design, Development & Testing of the products. He established complete R&D and Testing facility and Systematic Product Development Process. He led a special task force for the Localization of Products in India with Denso Quality. As a core group member at Denso in India, he was instrumental in the introduction of many new generation Products and Technologies. He has implemented many novel ideas to, reduce the product cost substantially and lead the Indian Market for Body Electricals and Thermal product line, while also establishing the image of "High Quality, Reasonable cost". He also headed the Manufacturing Engineering Department and was responsible for revamping the Production processes as a major manufacturing Strategy. Mr. Sharma is a Mechanical Engineer and has completed his MBA from the Thunderbird University.
Insufficient data for Ravinder to compare compensation growth.
Insufficient data for Ravinder to establish whether their remuneration is reasonable compared to companies of similar size in India.
Management Team Tenure
Average tenure of the
India Nippon Electricals
management team in years:
The tenure for the India Nippon Electricals management team is about average.
MD & Non-Independent Director
Chief Financial Officer
Chief Executive Officer
Chief Technical Officer
Company Secretary & Compliance Officer
Board of Directors Tenure
Average tenure and age of the
India Nippon Electricals
board of directors in years:
The tenure for the India Nippon Electricals board of directors is about average.
Did The Underlying Business Drive India Nippon Electricals's (NSE:INDNIPPON) Lovely 365% Share Price Gain?
For example, the India Nippon Electricals Limited (NSE:INDNIPPON) share price is up a whopping 365% in the last half decade, a handsome return for long term holders. … One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. … During five years of share price growth, India Nippon Electricals achieved compound earnings per share (EPS) growth of 11% per year.
Should You Be Holding India Nippon Electricals Limited (NSE:INDNIPPON)?
Today I've chosen to put the spotlight on India Nippon Electricals Limited (NSE:INDNIPPON) due to its excellent fundamentals in more than one area. … Below, I've touched on some key aspects you should know on a high level … If you're interested in understanding beyond my broad commentary,
Read This Before Considering India Nippon Electricals Limited (NSE:INDNIPPON) For Its Upcoming ₹3.00 Dividend
To qualify for the dividend check of ₹3.00 per share, investors must have owned the shares prior to 21 February 2019, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. … Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine India Nippon Electricals's latest financial data to analyse its dividend characteristics. … When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:?
Does India Nippon Electricals Limited (NSE:INDNIPPON) Have A Place In Your Portfolio?
Historically, India Nippon Electricals Limited (NSE:INDNIPPON) has been paying a dividend to shareholders. … Does India Nippon Electricals tick all the boxes of a great dividend stock? … Check out our latest analysis for India Nippon Electricals
India Nippon Electricals Limited (NSE:INDNIPPON): Why Return On Capital Employed Is Important
and want to begin learning the link between India Nippon Electricals Limited (NSE:INDNIPPON)’s return fundamentals and stock market performance. … You need to pay attention to this because your return on investment is linked to dividends and internal investments to improve the business, which can only occur if the company is expected to produce adequate earnings with the capital that has been provided. … Thus, to understand how your money can grow by investing in India Nippon Electricals, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE)
A Holistic Look At India Nippon Electricals Limited (NSE:INDNIPPON)
India Nippon Electricals Limited (NSE:INDNIPPON) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … If you're interested in understanding beyond my high-level commentary,
Should You Buy India Nippon Electricals Limited (NSE:INDNIPPON) For Its Dividend?
Historically, India Nippon Electricals Limited (NSE:INDNIPPON) has paid dividends to shareholders, and these days it yields 1.7%. … Let's dig deeper into whether India Nippon Electricals should have a place in your portfolio. … See our latest analysis for India Nippon Electricals
Does India Nippon Electricals Limited's (NSE:INDNIPPON) PE Ratio Signal A Selling Opportunity?
India Nippon Electricals Limited (NSE:INDNIPPON) is currently trading at a trailing P/E of 25, which is higher than the industry average of 22.4. … Though this might seem to be a negative, you might change your mind after I explain the assumptions behind the P/E ratio. … See our latest analysis for India Nippon Electricals
India Nippon Electricals Limited (NSE:INDNIPPON): A Look At Solid Capital Returns
and looking to gauge the potential return on investment in India Nippon Electricals Limited (NSE:INDNIPPON). … Buying India Nippon Electricals makes you a partial owner of the company. … To understand India Nippon Electricals’s capital returns we will look at a useful metric called return on capital employed.
What is Behind India Nippon Electricals Limited's (NSE:INDNIPPON) Superior ROE?
India Nippon Electricals Limited (NSE:INDNIPPON) delivered an ROE of 14.55% over the past 12 months, which is relatively in-line with its industry average of 14.22% during the same period. … If INDNIPPON borrows debt to invest in its business, its profits will be higher. … But ROE does not capture any debt, so we only see high profits and low equity, which is great on the surface.
India Nippon Electricals Limited designs, manufactures, and sells electronic ignition systems for auto industry in India and internationally. The company offers AC generator products, such as flywheel magneto, stator, and rotor products, as well as CDI and TCI products, regulator and rectifier units, ignition coils, exhaust gas recirculation controllers, engine controller units, auto choke-generation purpose engines, dual output ignition products, non-contact and contact type throttle position sensors, and PM alternators. Its products have applications in two-wheelers, three wheelers, and portable engines. The company was incorporated in 1984 and is based in Chennai, India.
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