Discounted Cash Flow Calculation for NSEI:SHARDA using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
Sharda Motor Industries
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:SHARDA DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
Sharda Motor Industries
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
Sharda Motor Industries's
is considered below, and whether this is a fair price.
Price based on past earnings
Sharda Motor Industries's earnings available for a low price, and how does
this compare to other companies in the same industry?
Sharda Motor Industries's earnings are expected to grow by 7.1% yearly, however this is not considered high growth (20% yearly).
Sharda Motor Industries's revenue is expected to grow by 8.1% 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.
Sharda Motor Industries'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.
Sharda Motor Industries
has a total score of
6/6, 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
Sharda Motor Industries's finances.
The net worth of a company is the difference between its assets and liabilities.
Sharda Motor Industries is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Sharda Motor Industries's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Sharda Motor Industries'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.
Sharda Motor Industries 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. Ajay Relan, B.Com. (Hons.) serves as Chief Executive Officer and Managing Director of Sharda Motor Industries Limited and has been its Executive Director since January 29, 1986. Mr. Relan has been a Non-Independent Non-Executive Director of Bharat Seats Ltd. since April 5, 1988. He has 30 years of experience. He holds B.Com (Hons), and OPM Program from Harvard Business School.
Ajay's compensation has increased by more than 20% in the past year.
Ajay's remuneration is higher than average for companies of similar size in India.
MD, CEO & Executive Director
President & CFO
Chief Operating Officer
Company Secretary & Compliance Officer
President of Sales & Strategy
Chief People Officer
Non-Independent Executive Director
President of Chennai Plant - I
Chief Operating Officer of Western Region
Chief Executive Officer of MWC Plant
Board of Directors Tenure
Average tenure and age of the
Sharda Motor Industries
board of directors in years:
The tenure for the Sharda Motor Industries board of directors is about average.
If You Had Bought Sharda Motor Industries (NSE:SHARDA) Shares Three Years Ago You'd Have Made 92%
For example, the Sharda Motor Industries Limited (NSE:SHARDA) share price is up 92% in the last three years, clearly besting than the market return of around 43% (not including dividends). … One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). … Sharda Motor Industries was able to grow its EPS at 35% per year over three years, sending the share price higher.
Read This Before Buying Sharda Motor Industries Limited (NSE:SHARDA) For Its Dividend
Historically, Sharda Motor Industries Limited (NSE:SHARDA) has paid a dividend to shareholders. … Does Sharda Motor Industries tick all the boxes of a great dividend stock? … Check out our latest analysis for Sharda Motor Industries
What Percentage Of Sharda Motor Industries Limited (NSE:SHARDA) Shares Do Insiders Own?
If you want to know who really controls Sharda Motor Industries Limited (NSE:SHARDA), then you'll have to look at the makeup of its share registry. … As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'. … With a market capitalization of ₹7.5b, Sharda Motor Industries is a small cap stock, so it might not be well known by many institutional investors.
Did Sharda Motor Industries Limited (NSE:SHARDA) Insiders Buy Up More Shares?
We often see insiders buying up shares in companies that perform well over the long term. … So we'll take a look at whether insiders have been buying or selling shares in Sharda Motor Industries Limited (NSE:SHARDA). … The Last 12 Months Of Insider Transactions At Sharda Motor Industries.
Can Sharda Motor Industries Limited's (NSE:SHARDA) ROE Continue To Surpass The Industry Average?
Over the last twelve months Sharda Motor Industries has recorded a ROE of 23%. … One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.23 in profit. … Check out our latest analysis for Sharda Motor Industries?
What Do You Get For Owning Sharda Motor Industries Limited (NSE:SHARDA)?
and looking to gauge the potential return on investment in Sharda Motor Industries Limited (NSE:SHARDA). … This share represents a portion of capital used by the company to operate the business, and it is important the company is able to use the capital base efficiently to create adequate cash flows for you as an investor. … Therefore, looking at how efficiently Sharda Motor Industries is able to use capital to create earnings will help us understand your potential return.
What Investors Should Know About Sharda Motor Industries Limited's (NSE:SHARDA) Financial Strength
The direct benefit for Sharda Motor Industries Limited (NSE:SHARDA), which sports a zero-debt capital structure, to include debt in its capital structure is the reduced cost of capital. … However, the trade-off is SHARDA will have to adhere to stricter debt covenants and have less financial flexibility. … Is SHARDA right in choosing financial flexibility over lower cost of capital.
What Kind Of Investor Owns Most Of Sharda Motor Industries Limited (NSE:SHARDA)?
Every investor in Sharda Motor Industries Limited (NSE:SHARDA) should be aware of the most powerful shareholder groups. … Sharda Motor Industries is not a large company by global standards. … View our latest analysis for Sharda Motor Industries
Why We Think Sharda Motor Industries Limited (NSE:SHARDA) Could Be Worth Looking At
Sharda Motor Industries Limited (NSE:SHARDA) is a company with exceptional fundamental characteristics. … Upon building up an investment case for a stock, we should look at various aspects. … In the case of SHARDA, it
What Should You Know About Sharda Motor Industries Limited's (NSE:SHARDA) Return On Capital?
and want to begin learning the link between Sharda Motor Industries Limited (NSE:SHARDA)’s return fundamentals and stock market performance. … Thus, to understand how your money can grow by investing in Sharda Motor Industries, 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) … Sharda Motor Industries's Return On Capital Employed
Sharda Motor Industries Limited manufactures, assembles, and sells auto components and white goods components in India. It offers silencers, exhaust pipes, suspension systems, seat trims and seat frames, catalytic converters, seat covers, soft top canopies, pressed part-white goods products, sheet metal components, and plastic parts, as well as provides exhaust systems for passenger and commercial vehicles, and tractors. It also exports its products. The company serves automotive and white goods industries. Sharda Motor Industries Limited was founded in 1986 and is based in New Delhi, India.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.