Discounted Cash Flow Calculation for NSEI:VARDHACRLC 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:VARDHACRLC 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
Vardhman Acrylics's earnings available for a low price, and how does
this compare to other companies in the same industry?
Vardhman Acrylics's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Unable to determine if Vardhman Acrylics 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.
Vardhman Acrylics'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.
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
Vardhman Acrylics's finances.
The net worth of a company is the difference between its assets and liabilities.
Vardhman Acrylics is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Vardhman Acrylics's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Vardhman Acrylics'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 1011.9x 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. Bal Krishan Choudhary, B.Sc., M.Com., M.B.A., Director of Operations for Vardhman Acrylics at Vardhman Textiles Limited. Mr. Choudhary has been the Managing Director at Vardhman Acrylics Ltd. since May 12, 2008 and served as its President. He served as the President of Steel Division at Vardhman Textiles Limited. He has 32 years of experience in Steel and Textile businesses. He joined Vardhman Textiles on December 23, 1985. He served as the Chief Commercial Manager of Usha Alloys & Steels Ltd. Mr. Choudhary has been a Non Independent Executive Director at Vardhman Acrylics Ltd. since May 12, 2008. He serves as a Director of Bharuch Eco-Aqua Infrastructure Limited. He has been a Non-Executive Independent Director of Vardhman Spinning & General Mills since 2000. He has been a Non-Executive Non-Independent Director at Vardhman Special Steels Limited since March 15, 2011. He served as a Non-Executive Independent Director of Vardhman Holdings Ltd., from January 28, 2000 to May 13, 2008. He served as an Executive Director of Vardhman Textiles Limited. Mr. Choudhary is a Post Graduate in Commerce. He holds a Master in Business Administration (Gold Medalist) and a B.Sc.
Bal's compensation has been consistent with company performance over the past year.
Bal'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 Vardhman Acrylics management team is over 5 years, this suggests they are a seasoned and experienced team.
MD & Non-Independent Executive Director
CFO & Senior VP
Company Secretary & Compliance Officer
General Manager of Operation
Bhooshan Lal Uppal
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Vardhman Acrylics board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Examining Vardhman Acrylics Limited’s (NSE:VARDHACRLC) Weak Return On Capital Employed
Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … Return On Capital Employed (ROCE): What is it? … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
Does Vardhman Acrylics Limited (NSE:VARDHACRLC) Have A Good P/E Ratio?
To keep it practical, we'll show how Vardhman Acrylics Limited's (NSE:VARDHACRLC) P/E ratio could help you assess the value on offer. … Based on the last twelve months, Vardhman Acrylics's P/E ratio is 10.12. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Is Vardhman Acrylics's (NSE:VARDHACRLC) 153% Share Price Increase Well Justified?
One great example is Vardhman Acrylics Limited (NSE:VARDHACRLC) which saw its share price drive 153% higher over five years. … While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. … During five years of share price growth, Vardhman Acrylics actually saw its EPS drop 3.1% per year.
Vardhman Acrylics Limited (NSE:VARDHACRLC): Should The Recent Earnings Drop Worry You?
Analyzing Vardhman Acrylics Limited's (NSE:VARDHACRLC) track record of past performance is a valuable exercise for investors. … Today I will assess VARDHACRLC's recent performance announced on 31 December 2018 and compare these figures to its long-term trend and industry movements. … Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 1.0%, indicating the rate at which VARDHACRLC is growing has slowed down
Vardhman Acrylics Limited (NSE:VARDHACRLC) Delivered A Better ROE Than Its Industry
With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.098 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Should Vardhman Acrylics Limited (NSE:VARDHACRLC) Be Part Of Your Portfolio?
In the last few years Vardhman Acrylics Limited (NSE:VARDHACRLC) has paid a dividend to shareholders. … Does Vardhman Acrylics tick all the boxes of a great dividend stock? … See our latest analysis for Vardhman Acrylics?
Why Vardhman Acrylics Limited's (NSE:VARDHACRLC) CEO Pay Matters To You
First, this article will compare CEO compensation with compensation at similar sized companies. … How Does Bal Choudhary's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that Vardhman Acrylics Limited has a market cap of ₹3.3b, and is paying total annual CEO compensation of ₹8.5m.
Here's What Vardhman Acrylics Limited's (NSE:VARDHACRLC) P/E Ratio Is Telling Us
To keep it practical, we'll show how Vardhman Acrylics Limited's (NSE:VARDHACRLC) P/E ratio could help you assess the value on offer. … Vardhman Acrylics has a P/E ratio of 7.26, based on the last twelve months. … Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Should We Be Delighted With Vardhman Acrylics Limited's (NSE:VARDHACRLC) ROE Of 13%?
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. … Our data shows Vardhman Acrylics has a return on equity of 13% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity
Does Vardhman Acrylics Limited's (NSE:VARDHACRLC) CEO Pay Matter?
Recognizing whether CEO incentives are aligned with shareholders is a crucial part of investing. … Incentives can be in the form of compensation, which should always be structured in a way that promotes value-creation to shareholders. … Choudhary’s pay and compare this to the company’s performance over the same period, as well as measure it against other
Vardhman Acrylics Limited manufactures and supplies acrylic fiber and tow in India. Its products are used in apparels, including children clothes, sweaters, mufflers, T-shirts, scarves, socks, ties, under wears, shirtings, track-suits, shalwar kamiz, and jerseys; and house-hold uses, such as carpets, woven blankets, blankets, rug bed sheets, buntings, bath mats, towels, and draperies. The company markets its products under the VARLAN brand name. Vardhman Acrylics Limited was incorporated in 1990 and is based in Ludhiana, India. Vardhman Acrylics Limited is a subsidiary of Vardhman Textiles Limited.
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