Discounted Cash Flow Calculation for NSEI:RSWM 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.
NSEI:RSWM DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
RSWM's earnings available for a low price, and how does
this compare to other companies in the same industry?
RSWM's earnings are expected to grow by 8.3% yearly, however this is not considered high growth (20% yearly).
Unable to determine if RSWM 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.
RSWM'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.
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.
Mr. Riju Jhunjhunwala serves as the Managing Director of Bhilwara Energy Limited. Mr. Jhunjhunwala has been a Managing Director of RSWM Limited since February 01, 2015 and served as its a Joint Managing Director from May 1, 2013 to February 2015. He serves as Chief Executive Officer at RSWM Limited. He is an Industrialist with diversified business experience. Previously, he served as Joint Managing Director of RSWM Limited since October 23, 2003. He has been a Non-Executive Director of HEG Ltd. since July 27, 2010. He serves as Director at Bhilwara Energy Ltd. He serves as a Director at Bhilwara Infotech Ltd., Jaipur Polyspin Ltd. and LNU Bhilwara Textiles Anusandhan Vikas Kendra. He has been a Non-Executive Director of Bhilwara Technical Textiles Limited since December 14, 2007. He served as a Non Executive Director of Cheslind Textiles Ltd. since September, 2007. He serves as a Director of Banswara Textile Mills Limited. He has been an Executive Director at RSWM Limited since May 1, 2013. He served as an Executive Director of HEG Ltd. from April 30, 2009 to July 27, 2010. He served as a Director of Cheslind Textiles Ltd. since September 2007. He served as an Executive Director at RSWM Limited from October 23, 2003 to April 29, 2009. Mr. Jhunjhunwala served as a Non Executive Director of BSL Ltd. until April 29, 2009. He holds a degree in Business Management Studies.
Riju's compensation has been consistent with company performance over the past year.
Riju's remuneration is higher than average for companies of similar size in India.
MD, CEO & Executive Director
Group President & Chief Human Resource Officer
CFO & Additional Director
Chief Operating Officer
Company Secretary & Compliance Officer
Chief Operating Officer of Banswara Lodha Unit
President of Mumbai Office
Chief Executive Officer of Melange Yarn Business
President of Corporate Office
Business Head of Operations - Yan Business
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the RSWM board of directors is about average.
Understanding Your Return On Investment In RSWM Limited (NSE:RSWM)
This is because the actual cash flow generated by the business dictates the potential for income (dividends) and capital appreciation (price increases), which are the two ways to achieve positive returns when buying a stock. … To understand RSWM’s capital returns we will look at a useful metric called return on capital employed. … What is Return on Capital Employed (ROCE)?
Did RSWM Limited (NSE:RSWM) Create Value For Investors Over The Past Year?
This analysis is intended to introduce important early concepts to people who are starting to invest. … and want to learn about Return on Equity using a real-life example. … RSWM Limited (NSE:RSWM) generated a below-average return on equity of 2.14% in the past 12 months, while its industry returned 7.65%.
Is RSWM Limited's (NSE:RSWM) PE Ratio A Signal To Sell For Investors?
I am writing today to help inform people who are new to the stock market. … and want to begin learning the link between RSWM Limited (NSE:RSWM)’s fundamentals and stock market performance. … Although some investors may jump to the conclusion that you should avoid the stock or sell if you own it, understanding the assumptions behind the P/E ratio might change your mind
RSWM Limited operates as a textile manufacturer in India. The company offers greige yarn for weaving, knitting, sewing, and industrial applications under the ULTIMA brand name; and melange yarn that is used for undergarments, shirts, business suits, socks, and sportswear, as well as bed linen, towels, and other home fabric products under the Melantra brand name. It also provides fabrics for formal and semi-formal wear under the Mayur brand; denim fabrics; and various functional yarns under the RSWM EDGE brand name. The company sells its products through a network of distributors and retailers. It exports its products to 78 countries worldwide. The company was formerly known as Rajasthan Spinning & Weaving Mills Ltd. RSWM Limited was founded in 1960 and is based in Noida, India.
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