Discounted Cash Flow Calculation for NSEI:SUBROS using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
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:SUBROS DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
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
is considered below, and whether this is a fair price.
Price based on past earnings
Subros's earnings available for a low price, and how does
this compare to other companies in the same industry?
Subros's earnings are expected to grow significantly at over 20% yearly.
Subros's revenue is expected to grow by 8.8% 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.
Subros'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.
has a total score of
4/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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.
TENURE AS CEO
Ms. Shradha Suri Marwah has been a Managing Director of Subros Limited since May 12, 2008. Ms. Marwah serves as a Director of Mercantile Capital and Financial Services Pvt. Ltd. She serves as an Executive Director of Fibcom India Ltd. She serves as a Director of Rohan Motors Limited, Prima Telecom Ltd. and Prime Cellular Limited. She serves as aN Executive Director of Subros. She served as a Director of Bharat Hotels Ltd. She holds Master of Science in International Marketing Management, London (U.K) and Master of Science in Information Systems from LSE (U.K). Ms. Marwah has an economics graduate from the Delhi University.
Shradha's compensation has been consistent with company performance over the past year, both up more than 20%.
Shradha's remuneration is higher than average for companies of similar size in India.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Subros management team is about average.
MD & Non-Independent Executive Director
CFO & Senior VP of Finance
Compliance Officer & Company Secretary
Senior General Manager of Tool Room
General Manager of Tech Cell
V. B. Savio
Senior General Manager of Finance
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Subros board of directors is about average.
Should You Like Subros Limited’s (NSE:SUBROS) High Return On Capital Employed?
Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.' How Do You Calculate Return On Capital Employed? … Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Subros: 0.20 = ₹1.5b ÷ (₹14b - ₹6.4b) (Based on the trailing twelve months to March 2019.) So, Subros has an ROCE of 20%.
Despite Its High P/E Ratio, Is Subros Limited (NSE:SUBROS) Still Undervalued?
The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Subros: P/E of 22.28 = ₹275.65 ÷ ₹12.37 (Based on the year to March 2019.) Is A High Price-to-Earnings Ratio Good? … The P/E ratio indicates whether the market has higher or lower expectations of a company. … NSEI:SUBROS Price Estimation Relative to Market, May 27th 2019 Its relatively high P/E ratio indicates that Subros shareholders think it will perform better than other companies in its industry classification.
If You Like EPS Growth Then Check Out Subros (NSE:SUBROS) Before It's Too Late
See our latest analysis for Subros Subros's Earnings Per Share Are Growing. … One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. … You can take a look at the company's revenue and earnings growth trend, in the chart below.
Do Insiders Own Lots Of Shares In Subros Limited (NSE:SUBROS)?
The big shareholder groups in Subros Limited (NSE:SUBROS) have power over the company. … Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. … With a market capitalization of ₹19b, Subros is a small cap stock, so it might not be well known by many institutional investors.
Is Subros Limited (NSE:SUBROS) A Smart Choice For Dividend Investors?
Is Subros Limited (NSE:SUBROS) a good dividend stock? How would you know? A dividend paying company with growing earnings can be rewarding in the long term.. … Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.. … Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1
Subros's (NSE:SUBROS) Wonderful 850% Share Price Increase Shows How Capitalism Can Build Wealth
Then look at the Subros Limited (NSE:SUBROS) share price. … During five years of share price growth, Subros achieved compound earnings per share (EPS) growth of 24% per year. … This EPS growth is slower than the share price growth of 57% per year, over the same period.
Subros Limited (NSE:SUBROS): The Best Of Both Worlds
Subros Limited (NSE:SUBROS) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … In the case of SUBROS, it
Are Subros Limited's (NSE:SUBROS) Interest Costs Too High?
Subros Limited (NSE:SUBROS) is a small-cap stock with a market capitalization of ₹16b. … While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … Assessing first and foremost the financial health is
Our Take On Subros Limited's (NSE:SUBROS) CEO Salary
Shradha Marwah has been the CEO of Subros Limited (NSE:SUBROS) since 2008. … This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. … How Does Shradha Marwah's Compensation Compare With Similar Sized Companies?
Subros Limited (NSE:SUBROS) Earns Among The Best Returns In Its Industry
To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. … Understanding Return On Capital Employed (ROCE). … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
Subros Limited manufactures and sells thermal products for automotive applications in India. It provides air-conditioning (AC) systems and components, including thermal solutions for cars, buses, refrigeration vehicles, railways, home AC’s, tractors, and trucks. The company offers compressors; automotive condensers; heating, ventilating, and AC systems, such as heaters, evaporators, and blower units; tubes and hoses; bus ACs; driver cabin ACs for railway engines; transport refrigeration systems; truck cabin AC systems; off-roader AC systems; and AC systems for defense vehicles. Subros Limited was founded in 1985 and is headquartered in New Delhi, India.
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