Discounted Cash Flow Calculation for NSEI:CNOVAPETRO using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
CIL Nova Petrochemicals
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:CNOVAPETRO DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
CIL Nova Petrochemicals
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
CIL Nova Petrochemicals
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
CIL Nova Petrochemicals's share price is below the future cash flow value, but not at a moderate discount (< 20%).
CIL Nova Petrochemicals'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
CIL Nova Petrochemicals's
is considered below, and whether this is a fair price.
Price based on past earnings
CIL Nova Petrochemicals's earnings available for a low price, and how does
this compare to other companies in the same industry?
CIL Nova Petrochemicals's earnings are expected to grow significantly at over 20% yearly.
Unable to determine if CIL Nova Petrochemicals 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.
CIL Nova Petrochemicals'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.
CIL Nova Petrochemicals
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
CIL Nova Petrochemicals's finances.
The net worth of a company is the difference between its assets and liabilities.
CIL Nova Petrochemicals's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
CIL Nova Petrochemicals's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
CIL Nova Petrochemicals'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 3.4x 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.
Should You Take Comfort From Insider Transactions At CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO)?
So before you buy or sell CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO), you may well want to know whether insiders have been buying or selling. … As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'. … As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price
Here’s why CIL Nova Petrochemicals Limited’s (NSE:CNOVAPETRO) Returns On Capital Matters So Much
Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Understanding Return On Capital Employed (ROCE). … The formula for calculating the return on capital employed is:
Is CIL Nova Petrochemicals Limited's (NSE:CNOVAPETRO) High P/E Ratio A Problem For Investors?
To keep it practical, we'll show how CIL Nova Petrochemicals Limited's (NSE:CNOVAPETRO) P/E ratio could help you assess the value on offer. … CIL Nova Petrochemicals has a P/E ratio of 66.64, based on the last twelve months. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
What Should Investors Know About CIL Nova Petrochemicals Limited's (NSE:CNOVAPETRO) Capital Returns?
and looking to gauge the potential return on investment in CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO). … This share represents a portion of capital used by the company to operate the business, and it is important the company is able to use the capital base efficiently to create adequate cash flows for you as an investor. … Thus, to understand how your money can grow by investing in CIL Nova Petrochemicals, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE)
Why CIL Nova Petrochemicals Limited's (NSE:CNOVAPETRO) ROE Of 1.52% Does Not Tell The Whole Story
CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO) generated a below-average return on equity of 1.52% in the past 12 months, while its industry returned 7.38%. … Knowing these components can change your views on CNOVAPETRO's below-average returns. … I will take you through how metrics such as financial leverage impact ROE which may affect the overall sustainability of CNOVAPETRO's returns
Should You Be Tempted To Sell CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO) At Its Current PE Ratio?
and want to begin learning the link between CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO)’s fundamentals and stock market performance. … CIL Nova Petrochemicals Limited (NSE:CNOVAPETRO) trades with a trailing P/E of 62.9x, which is higher than the industry average of 16.2x. … While CNOVAPETRO might seem like a stock to avoid or sell if you own it, it is important to understand the assumptions behind the P/E ratio before you make any investment decisions
CIL Nova Petrochemicals Limited manufactures and sells yarns in India. The company offers partially oriented, micro-filament, draw twisted, texturized, and fully drawn yarns. It is also involved in the preparation and spinning of man-made fibers, including blended manmade fibers and others. The company also exports its products to Turkey, Spain, Italy, Germany, Peru, Tanzania, Brazil, Israel, France, Portugal, and the Middle East. CIL Nova Petrochemicals Limited was incorporated in 2003 and is based in Ahmedabad, India.
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