Discounted Cash Flow Calculation for BSE:514142 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:514142 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.
T.T's share price is below the future cash flow value, and at a moderate discount (> 20%).
T.T'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
T.T'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 T.T 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 T.T's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare T.T's earnings growth to the India market average as no estimate data is available.
Unable to compare T.T's revenue growth to the India market average as no estimate data is available.
Unable to determine if T.T is high growth as no earnings estimate data is available.
Unable to determine if T.T 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.
T.T'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
1/6, 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
Mr. Sanjay Kumar Jain, MBA (IIM, AHEMDABAD), ACS, ACMA, B.COM (H) has been the Managing Director of TT Limited since May 25, 2011 and served as Joint Managing Director until May 25, 2011. Mr. Jain has an experience of over 12 years in the industry and is looking after marketing and finance of the TT Ltd. He has been instrumental in setting up marketing network for raw cotton and cotton yarn in over 20 countries in the world. He has been Whole time director of TT Ltd. since July 1, 2002. He is an MBA-Gold Medalist from IIM, Ahmedabad and an Associate Member of the Institute of Company Secretaries of India (ACS) and Institute of Cost Accountants of India (AICWA) and Studies from Harvard Business School.
Sanjay's compensation has been consistent with company performance over the past year.
Sanjay'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 average tenure for the T.T management team is over 5 years, this suggests they are a seasoned and experienced team.
MD & Whole Time Director
Joint MD & Executive Director
Director of Finance
B. N. Modi
Chief Administrative Officer
Company Secretary & Compliance officer
Vice President of Marketing
Vice President of Technical
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the T.T board of directors is over 10 years, this suggests they are a seasoned and experienced board.
T.T. Limited manufactures and sells textiles in India. The company’s products include raw cotton; cotton yarn for knitting and weaving; various knitted fabrics; knitted innerwear; garments for men, ladies, and kids; and cotton and polyester sewing threads. It also offers agro commodities, such as poultry and cattle feed, including soybean meal, de oiled rice bran, cotton seed meal, groundnut meal, castor meal, safflower meal, rapeseed meal, and barley; oil seeds, such as groundnut kernels, hulled sesame seeds, natural white and black sesame seeds, and niger seeds; spices consisting of cumin, fennel, ajwain, dill, fenugreek, and coriander seeds, as well as turmeric fingers; grains, including yellow corn/maize, millets, and sorghum; and castor oil and derivatives, such as castor oil and castor seed extraction meal. The company also exports its products. T.T. Limited was incorporated in 1978 and is headquartered in New Delhi, India.
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