Discounted Cash Flow Calculation for NSEI:SFL 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:SFL 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
Sheela Foam's earnings available for a low price, and how does
this compare to other companies in the same industry?
Sheela Foam's earnings are expected to grow significantly at over 20% yearly.
Sheela Foam's revenue is expected to grow by 11.7% yearly, however this is not considered high growth (20% yearly).
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.
Sheela Foam'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
2/6, 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. Rahul Gautam has been a Managing Director of Sheela Foam Limited (also knoenas Sheela Foam Private Limited) since April 01, 1996 and serves its Chairman. Mr. Gautam personally looks after the Group's Finance, JVs and Acquisitions. With his vision, intense zeal and highly focused approach Sheela Foam has not only achieved enviable growth in the past, but also pushing itself to scale greater heights. Under his stewardship, in 2005, Sheela Foam acquired the business of Polyurethane Foam & Polystyrene of M/s. Joyce Foam, Australia, entered into joint ventures with M/s. Woodbridge group, Canada and A.H. Beard, Australia in 2006 & 2008 respectively. He is also the Chairman of Polyurethane Association of India. He serves as Director of Sheela Foam Private Limited. Under his dynamic leadership, the first Polyurethane Summit 'PUTECH-2005' was successfully held in October '05 and subsequently in March '08 in India. He serves as Chairman of Joyce Pty Ltd., Australia. He serves as a Director at Joyce Foam Pty Ltd. A Chemical Engineer from IIT, Kanpur with Masters Degree in Chemical Engineering from Polytechnic Institute of New York, USA.
Rahul's compensation has been consistent with company performance over the past year.
Rahul'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 Sheela Foam management team is about average.
Chairman & MD
Compliance Officer & Company Secretary
Director of Sales & Marketing and Whole-Time Director
Founder & Chairperson Emeritus
Chief Financial Officer
Chief Operating Officer
Chief Information Officer & Chief Human Resources Officer
Frank Van Gogh
CEO & Director of Joyce Foam Pty Ltd
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Sheela Foam board of directors is less than 3 years, this suggests a new board.
Board of Directors
Chairman & MD
Director of Sales & Marketing and Whole-Time Director
Did You Manage To Avoid Sheela Foam's (NSE:SFL) 14% Share Price Drop?
For example, the Sheela Foam Limited (NSE:SFL) share price is down 14% in the last year. … In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. … By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Are Sheela Foam Limited’s (NSE:SFL) High Returns Really That Great?
In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business. … What is Return On Capital Employed (ROCE)? … ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business.
Does Sheela Foam Limited's (NSE:SFL) Recent Track Record Look Strong?
How SFL fared against its long-term earnings performance and its industry … SFL's trailing twelve-month earnings (from 31 December 2018) of ₹1.3b has … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 20%, indicating the rate at which SFL is growing has slowed down.
Does Sheela Foam Limited's (NSE:SFL) Stock Price Account For Its Growth?
Sheela Foam Limited (NSE:SFL) is a stock well-positioned for future growth, but many investors are wondering whether its last closing price of ₹1295.05 is based on unrealistic expectations. … Check out our latest analysis for Sheela Foam? … How is Sheela Foam going to perform in the future.
Should You Be Tempted To Sell Sheela Foam Limited (NSE:SFL) Because Of Its P/E Ratio?
To keep it practical, we'll show how Sheela Foam Limited's (NSE:SFL) P/E ratio could help you assess the value on offer. … How Do I Calculate Sheela Foam's Price To Earnings Ratio … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Today we will examine Sheela Foam’s ability to generate cash flows, as well as the level of capital expenditure it is expected to incur over the next couple of years, which will result in how much money goes to you. … Free cash flow (FCF) is the amount of cash Sheela Foam has left after it pays off its expenses, including its net capital expenditures, which is what the company needs to spend each year to maintain or grow its business operations. … There are two methods I will use to evaluate the quality of Sheela Foam’s FCF: firstly, I will measure its FCF yield relative to the market index yield; secondly, I will examine whether its operating cash flow will continue to grow into the future, which will give us a sense of sustainability
Can Sheela Foam Limited's (NSE:SFL) ROE Continue To Surpass The Industry Average?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … Another way to think of that is that for every ₹1 worth of equity in the company, it was able to earn ₹0.20. … Return on Equity = Net Profit ÷ Shareholders' Equity
Sheela Foam Limited (NSE:SFL) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … In the case of SFL, it
Did Sheela Foam Limited's (NSE:SFL) Recent Earnings Growth Beat The Trend?
After reading Sheela Foam Limited's (NSE:SFL) latest earnings update (30 June 2018), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. … As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. … How SFL fared against its long-term earnings performance and its industry
Future Outlook Of Consumer Industry And Sheela Foam Limited (NSE:SFL)
operates in the consumer discretionary industry,. … whose performance is predominantly driven by consumer confidence, which is linked to employment and wage rates. … Consumer discretionary analysts are forecasting for the entire industry,
Sheela Foam Limited manufactures and sells polyurethane foams and mattresses in India and Australia. The company provides various technical products, such as automotive, reticulated, silenctech, sound absorption, specialty, UV, rebonded, high resilience, pure grade, flame retardant, polyether grade lamination, anti static, thermo-formable, hard and soft, and polyurethane and polyester foam products, as well as visco-elastic temperature sensitive materials. It also offers mattresses, pillows, comforters/duvets, mattress protectors, bolsters, back cushions, and sofa-cum beds, as well as furniture cushioning products. The company provides its products under the Sleepwell, Feather Foam, and Lamiflex brands. It sells its products for residential use, as well as for hotels, hospitals, and educational institutions. The company provides its products through distributors, dealers, and multi-branded outlets, as well as exports its products to approximately 32 countries. Sheela Foam Limited was incorporated in 1971 and is based in Ghaziabad, India.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.