Discounted Cash Flow Calculation for BSE:514128 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:514128 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.
Konark Synthetic's share price is below the future cash flow value, and at a moderate discount (> 20%).
Konark Synthetic'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
Konark Synthetic'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 Konark Synthetic 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 Konark Synthetic's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Konark Synthetic's earnings growth to the India market average as no estimate data is available.
Unable to compare Konark Synthetic's revenue growth to the India market average as no estimate data is available.
Unable to determine if Konark Synthetic is high growth as no earnings estimate data is available.
Unable to determine if Konark Synthetic 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.
Konark Synthetic'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
Konark Synthetic's finances.
The net worth of a company is the difference between its assets and liabilities.
Konark Synthetic is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Konark Synthetic's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Konark Synthetic'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 not covered by short term assets, assets are 0.6x 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. Amitabh Ramswaroop Kejriwal has been Managing Director of Konark Synthetics Limited since April 1, 2017 and previously served as its Director of Textiles from May 25, 2016 to April 1, 2017. Mr. Kejriwal serves as a Director of Excel Synthetic Pvt. Ltd. He has been a Director of Jamirah Tea Company Limited since May 8, 2007.
Amitabh's compensation has increased whilst company is loss making.
Amitabh's remuneration is about 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 Konark Synthetic management team is about average.
MD & Director
Chief Financial Officer
Company Secretary & Compliance Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Konark Synthetic board of directors is about average.
Konark Synthetic Limited, together with its subsidiaries, engages in the textile business in India. The company offers specialty polyester yarns, including texturized and air-texturized yarns; fabrics, including yarn dyed and piece dyed polyester fabrics; blends with cotton, linen, rayon, and silk; and carded, combed, and compact cotton yarns. It also provides apparel comprising trousers, shirts, and shorts. The company also exports its products. Konark Synthetic Limited was incorporated in 1984 and is based in Mumbai, India.
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