Discounted Cash Flow Calculation for NSEI:VARDMNPOLY 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:VARDMNPOLY 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.
Vardhman Polytex's share price is below the future cash flow value, and at a moderate discount (> 20%).
Vardhman Polytex'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
Vardhman Polytex'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 Vardhman Polytex 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 Vardhman Polytex's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Vardhman Polytex's earnings growth to the India market average as no estimate data is available.
Unable to compare Vardhman Polytex's revenue growth to the India market average as no estimate data is available.
Unable to determine if Vardhman Polytex is high growth as no earnings estimate data is available.
Unable to determine if Vardhman Polytex 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 Polytex'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.
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 Polytex's finances.
The net worth of a company is the difference between its assets and liabilities.
Vardhman Polytex's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Vardhman Polytex's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Vardhman Polytex'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.
Vardhman Polytex has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.
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. Adish Oswal, B.Com, has been Chairman, Managing Director and Chief Operating Officer at Vardhman Polytex Limited since December 26, 2018. He serves as Managing Director of Oswal Retail Pvt. Ltd. Mr. Oswal served as a Managing Director of Business & Corporate Affairs at Vardhman Polytex Ltd. until December 2018 and serves as an Executive Director since July 31, 2009. He is actively participating into administrative and day-to-day functioning of Vardhman Polytex and involved into the Strategic Decision making and key management decisions for the future growth. Mr. Oswal has been Executive Director of Vardhman Polytex Ltd since July 31, 2009. He serves as a Director of Oswal P.M. Hammerle Textiles Ltd., Oswal Retail (P) Ltd., Oswal Holding (P) Ltd., Oswal Infratech (P) Ltd., and Allepy Investment & Trading Co. (P).
Adish's compensation has been consistent with company performance over the past year.
Adish'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 Polytex management team is less than 2 years, this suggests a new team.
Vice President of Technical
Executive Vice President
Chief Production Officer
Chief Financial Officer
Company Secretary & Compliance Officer
Head of Corporate Human Resources
Chief General Manager
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Vardhman Polytex board of directors is less than 3 years, this suggests a new board.
Imagine Owning Vardhman Polytex (NSE:VARDMNPOLY) And Trying To Stomach The 75% Share Price Drop
So take a moment to sympathize with the long term shareholders of Vardhman Polytex Limited (NSE:VARDMNPOLY), who have seen the share price tank a massive 75% over a three year period. … Given that Vardhman Polytex didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. … Over the last three years, Vardhman Polytex's revenue dropped 13% per year.
Do Insiders Own Shares In Vardhman Polytex Limited (NSE:VARDMNPOLY)?
If you want to know who really controls Vardhman Polytex Limited (NSE:VARDMNPOLY), then you'll have to look at the makeup of its share registry. … Vardhman Polytex is not a large company by global standards. … View our latest analysis for Vardhman Polytex
Should You Worry About Vardhman Polytex Limited's (NSE:VARDMNPOLY) CEO Pay?
Ashok Oswal took the reins as CEO of Vardhman Polytex Limited's (NSE:VARDMNPOLY) and grew market cap to ₹273.06m recently. … Understanding how CEOs are incentivised to run and grow their company is an important aspect of investing in a stock. … See our latest analysis for Vardhman Polytex
Who Are The Major Shareholders Of Vardhman Polytex Limited (NSE:VARDMNPOLY)?
See our latest analysis for Vardhman Polytex NSEI:VARDMNPOLY Ownership_summary Jun 5th 18 Institutional Ownership Institutional investors transact in large blocks which can influence the momentum of stock prices, at least in the short-term, especially when there is a low level of public shares available on the market to trade. … Private Company Ownership Another group of owners that a potential investor in VARDMNPOLY should consider are private companies, with a stake of 57.79%. … Thus, potential investors should look into these business relations and check how it can impact long-term shareholder returns.Next Steps: With a low level of institutional ownership, investors in VARDMNPOLY need not worry about non-fundamental factors such as ownership structure causing large impact on stock prices.
Vardhman Polytex Limited (NSE:VARDMNPOLY): Does The Earnings Decline Make It An Underperformer?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. … NSEI:VARDMNPOLY Income Statement Apr 11th 18 We can further analyze Vardhman Polytex's loss by looking at what the industry has been experiencing over the past few years. … Each year, for the past half a decade Vardhman Polytex's revenue growth has been fairly muted, with an annual growth rate of 0.99%, on average.
Who Are The Largest Shareholders In Vardhman Polytex Limited (NSE:VARDMNPOLY)?
View our latest analysis for Vardhman Polytex NSEI:VARDMNPOLY Ownership_summary Mar 2nd 18 Institutional Ownership Institutional investors are one of the largest group of market participants and their buy-sell decisions on a company's stock can significantly impact prices, more so, when there are relatively small amounts of shares available on the market to trade. … Private Company Ownership Another important group of owners for potential investors in VARDMNPOLY are private companies that hold a stake of 57.79% in VARDMNPOLY. … As a result, potential investors should further explore the company's business relations with these companies and find out if they can affect shareholder returns in the long-term.Next Steps: Institutional ownership in VARDMNPOLY is not at a level that would concern investors.
What Are The Drivers Of Vardhman Polytex Limited's (NSE:VARDMNPOLY) Risks?
The second type is market risk, one that you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks in the market. … With a market cap of IN₨556.16M, VARDMNPOLY falls within the small-cap spectrum of stocks, which are found to experience higher relative risk compared to larger companies. … Depending on the composition of your portfolio, low-beta stocks such as VARDMNPOLY is valuable to lower your risk of market exposure, in particular, during times of economic decline.
Vardhman Polytex Limited (NSE:VARDMNPOLY): Does The -120.1% Earnings Decline Make It An Underperformer?
After reading Vardhman Polytex Limited's (NSEI:VARDMNPOLY) most recent earnings announcement (31 March 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. … I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. … For Vardhman Polytex, its latest twelve-month earnings is -₹330.4M, which, against last year’s figure, has become more negative.
Vardhman Polytex Limited, through its subsidiaries, manufactures and sells yarns and garments in India and internationally. The company provides yarns, including grey cotton yarns, polyester cotton yarns, compact yarns, organic cotton yarns, BCI cotton yarns and blends, dyed yarns, SUPIMA cotton yarns, modal and cotton/modal blends, bamboo and cotton/bamboo blends, slub/multicount yarns, and lycra/spandex blended core spun yarns. It also offers fabrics, including yarn dyed shirting fabrics; various fabric constructions; and fabrics with mechanical and chemical finishes. In addition, the company provides garments, such as polo and round neck T-shirts, hoodies, sweatshirts, etc. for men, women, and kids. Further, the company develops real estate projects. The company was incorporated in 1980 and is based in Ludhiana, India.
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