Discounted Cash Flow Calculation for BSE:509895 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:509895 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.
Hindoostan Mills's share price is below the future cash flow value, and at a moderate discount (> 20%).
Hindoostan Mills's share price is below the future cash flow value, but not 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
Hindoostan Mills'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 Hindoostan Mills 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 Luxury industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Hindoostan Mills's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Hindoostan Mills's earnings growth to the India market average as no estimate data is available.
Unable to compare Hindoostan Mills's revenue growth to the India market average as no estimate data is available.
Unable to determine if Hindoostan Mills is high growth as no earnings estimate data is available.
Unable to determine if Hindoostan Mills 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.
Hindoostan Mills'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
Hindoostan Mills's finances.
The net worth of a company is the difference between its assets and liabilities.
Hindoostan Mills is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Hindoostan Mills's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Hindoostan Mills'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.
Debt is covered by short term assets, assets are 7.4x debt.
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. Rajiv Ranjan has been Chief Executive Officer of Hindoostan Mills Limited since September 7, 2017 and its Executive Director. Mr. Ranjan served as the President of Textiles of Mafatlal Industries. He served as Senior Vice President of Mafatlal Denim Limited. Mr. Ranjan is credentialed as an Associate Certified Coach by the International Coach Federation , USA. Mr. Ranjan is having extensive exposure to a gamut of areas including manufacturing, marketing, finance, costing and HR with an overall P&L responsibility of business across the tenure. Mr. Ranjan has also competence in setting up of Greenfield projects and turning around operations while scaling them up into sustainable and profitable business. He has deft in interacting with global stakeholders across various levels of hierarchy including internal as well as customers, senior management and auditors. Mr. Ranjan’s major last assignment was President – Textiles with Mafatlal Industries Limited from January, 1994 to July, 2014. Mr. Ranjan has done B. Tech. in Textile Engineering from IIT, New Delhi and having work experience of more than 38 years in the Textile Industry.
Insufficient data for Rajiv to compare compensation growth.
Rajiv's remuneration is higher than average for companies of similar size in India.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Hindoostan Mills management team is less than 2 years, this suggests a new team.
CEO & Executive Director
CFO & Assistant GM
Company Secretary & Compliance Officer
President of Engineering
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Hindoostan Mills board of directors is less than 3 years, this suggests a new board.
Hindoostan Mills Limited manufactures and sells textiles products in India and internationally. It offers open end yarns, and cotton greige and processed fabrics. The company also manufactures and supplies calendar bowls, calendaring machines, squeeze rolls, and related products for the textile, paper, and steel industries. In addition, it manufactures fabrics, uni-directional fabrics, and other specialized products, as well as provides high performance fabric carbon fiber, glass, and aramide composite reinforcements, specialty chemicals, and composite end products for the infrastructure, automotive, marine, sports, and industrial markets. The company was founded in 1873 and is headquartered in Mumbai, India.
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