Discounted Cash Flow Calculation for NSEI:WELSPUNIND 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:WELSPUNIND 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
Welspun India's earnings available for a low price, and how does
this compare to other companies in the same industry?
Welspun India's earnings are expected to grow significantly at over 20% yearly.
Welspun India's revenue is expected to grow by 13.9% 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.
Welspun India'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
Ms. Dipali Goenka has been a Joint-Managing Director of Welspun India Ltd. since April 2002 and has been its Chief Executive Officer since April 2002. Ms. Goenka serves as Managing Director at Welspun Retail Limited since January 4, 2011. She has been an Executive Director of Welspun India Ltd. since April 1, 2013. She serves as a Director of Welspun Retail Limited. She served as a Director of Welspun Retail Limited since April 1, 2011.
Dipali's compensation has been consistent with company performance over the past year.
Dipali'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 Welspun India management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO, Joint MD & Executive Director
Rajesh Ramesh Mandawewala
MD & Executive Director
Chief Financial Officer
Compliance Officer & Company Secretary
Head of Business Operations & Executive Director
Chief Executive Officer of UK
Executive Director of Textile Park
Executive Director of Operations - Anjar
Chief Financial Officer of Welspun UK Ltd
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Welspun India board of directors is about average.
Should You Worry About Welspun India Limited's (NSE:WELSPUNIND) CEO Pay Cheque?
This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … How Does Dipali Goenka's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that Welspun India Limited has a market cap of ₹59b, and is paying total annual CEO compensation of ₹54m.
Did You Miss Welspun India's (NSE:WELSPUNIND) Whopping 458% Share Price Gain?
Then look at the Welspun India Limited (NSE:WELSPUNIND) share price. … 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. … Over half a decade, Welspun India managed to grow its earnings per share at 39% a year.
These Factors Make Welspun India Limited (NSE:WELSPUNIND) An Interesting Investment
I've been keeping an eye on Welspun India Limited (NSE:WELSPUNIND) because I'm attracted to its fundamentals. … Looking at the company as a whole, as a potential stock investment, I believe WELSPUNIND has a lot to offer.
Boasting A 15% Return On Equity, Is Welspun India Limited (NSE:WELSPUNIND) A Top Quality Stock?
Our data shows Welspun India has a return on equity of 15% for the last year. … One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.15 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
How Many Welspun India Limited (NSE:WELSPUNIND) Shares Do Institutions Own?
The big shareholder groups in Welspun India Limited (NSE:WELSPUNIND) have power over the company. … With a market capitalization of ₹59b, Welspun India is a decent size, so it is probably on the radar of institutional investors. … Taking a look at the our data on the ownership groups (below), it's seems that
Estimating The Fair Value Of Welspun India Limited (NSE:WELSPUNIND)
by taking the expected future cash flows and discounting them to their present value. … discounted cash flows (DCF). … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model
Why Welspun India Limited’s (NSE:WELSPUNIND) Return On Capital Employed Might Be A Concern
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). … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
Does Welspun India Limited's (NSE:WELSPUNIND) CEO Salary Reflect Performance?
How Does Dipali Goenka's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that Welspun India Limited has a market cap of ₹60b, and is paying total annual CEO compensation of ₹54m. … We looked at a group of companies with market capitalizations from ₹29b to ₹116b, and the median CEO compensation was ₹25m.
Despite Its High P/E Ratio, Is Welspun India Limited (NSE:WELSPUNIND) Still Undervalued?
This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … Welspun India has a price to earnings ratio of 14.8, based on the last twelve months. … How Do I Calculate Welspun India's Price To Earnings Ratio
Welspun India Limited manufactures and sells home textile products in India and internationally. The company offers towels, including wash cloths, face towels, hand towels, bath towels, bath sheets, terry, and beach towels; bath rugs/mats, such as cotton, nylon, polyethylene terephthalate, and polyester filament-based Drylon and Resilon yarn rugs; area and bi-component fibre rugs; bathrobes; and bed sheets and carpets. It also provides utility bedding products comprising pillow fillers, mattress pads, and down-alternative filled comforters; and fashion bedding products for the bedroom. The company offers its products under the Christy, Kingsley Home, Crowning Touch, Spaces, Welhome, Amy Butler, and Spun brands. In addition, it generates power. The company was formerly known as Welspun Winilon Silk Mills Pvt. Ltd. and changed its name to Welspun India Limited in 1995. The company was founded in 1985 and is based in Mumbai, India. Welspun India Limited is a subsidiary of Prasert Multiventure Private Limited.
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