Discounted Cash Flow Calculation for BSE:504269 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.
BSE:504269 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Khaitan Electricals's share price is below the future cash flow value, and at a moderate discount (> 20%).
Khaitan Electricals's share price is below the future cash flow value, and at a substantial discount (> 40%).
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
Khaitan Electricals's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Khaitan Electricals has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Consumer Durables industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Khaitan Electricals's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Khaitan Electricals's earnings growth to the India market average as no estimate data is available.
Unable to compare Khaitan Electricals's revenue growth to the India market average as no estimate data is available.
Unable to determine if Khaitan Electricals is high growth as no earnings estimate data is available.
Unable to determine if Khaitan Electricals is high growth as no revenue estimate data is available.
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.
Khaitan 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.
has a total score of
0/6, 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
Khaitan Electricals's finances.
The net worth of a company is the difference between its assets and liabilities.
Khaitan Electricals's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Khaitan Electricals's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Khaitan 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.
Khaitan Electricals has negative shareholder equity (liabilities exceed assets) therefore debt is not 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.
TENURE AS CEO
Mr. Sunil Krishna Khaitan, B.Com, MBA, has been the Managing Director at Khaitan Electricals Limited since November 1998. Mr. Khaitan has been the Managing Director of Shalimar Wires Industries Ltd. since April 1,2008. He is In Charge of overall management of Shalimar Wires Industries Ltd. He has 27 years of overall experience in the industry. He has been the Chairman of Shalimar Wires Industries Ltd. since October 23, 2009. He has been the Chairman of Khaitan Electricals Limited since November 10, 2012 and served as its Vice Chairman from November 1998 to November 10, 2012. He served as the Chairman of Khaitan (India) Ltd. until August 12, 2016. He served as a Vice Chairman of Khaitan (India) Ltd. He has been an Executive Director of Khaitan Electricals since July 2, 2008 and a Director of Shalimar Wires Industries Ltd., since September 12, 2000. He serves as a Director of Shalimar Industries Ltd., SWIL International Pte Ltd. and Reliance Sheet Works Pvt. Ltd. He served as a Director of Khaitan (India) Ltd., since March 20, 1990 until August 12, 2016. He served as a Director at Sunil Healthcare Ltd., until January 31, 2006. Mr. Khaitan holds a Bachelor of Commerce and MBA.
Sunil's compensation has been consistent with company performance over the past year.
Sunil's remuneration is higher than average for companies of similar size in India.
Chairman & MD
Vice President of Finance and Corporate Affairs
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Khaitan Electricals board of directors is less than 3 years, this suggests a new board.
Khaitan Electricals Limited manufactures and sells electrical goods in India. The company offers ceiling, table, pedestal, wall/cabin, freshair, and coolair fans; industrial products comprising HD exhaust fans, air circulators, man coolers, and axial flow fans; and leon products, including ELD-retrofit, ELT-retrofit, ELQ-retrofit, spiral-retrofit, PL/PLC-non retrofit, T5 complete fitting, and LED bulbs, as well as consumer luminaries. It also provides appliances, such as juicer mixer grinders, mixer grinders, hand blenders, electric kettles, toasters, sandwich toasters, induction cockers, rice cookers, pressure cookers, steam and dry irons, emergency lamps, room and water heaters, immersion heaters, and air coolers; and domestic and agricultural pumps. In addition, the company exports its products to the Middle East countries, the United Arab Emirates, Ghana, Yemen, Uganda, Iraq, Nepal, Bangladesh, Sri Lanka, etc. Khaitan Electricals Limited was incorporated in 1975 and is based in Kolkata, India.
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