Discounted Cash Flow Calculation for NSEI:DCMFINSERV using Excess Returns Model Model
The calculations below outline how an intrinsic value for DCM Financial Services is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
Amount off the current price
DCM Financial Services
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
DCM Financial Services
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
DCM Financial Services's share price is below the future cash flow value, and at a moderate discount (> 20%).
DCM Financial Services'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
DCM Financial Services's
is considered below, and whether this is a fair price.
Price based on past earnings
DCM Financial Services'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 DCM Financial Services 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 Consumer Finance industry annual growth in earnings.
Earnings growth vs Low Risk Savings
DCM Financial Services
expected to grow at an
Unable to compare DCM Financial Services's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare DCM Financial Services's earnings growth to the India market average as no estimate data is available.
Unable to compare DCM Financial Services's revenue growth to the India market average as no estimate data is available.
Unable to determine if DCM Financial Services is high growth as no earnings estimate data is available.
Unable to determine if DCM Financial Services 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.
DCM Financial Services'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.
DCM Financial Services
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
DCM Financial Services's finances.
The net worth of a company is the difference between its assets and liabilities.
DCM Financial Services's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
DCM Financial Services's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
DCM Financial Services'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.
DCM Financial Services 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. Shantanu Deveshwar has been Whole-time Director since November 30, 2018 and had been Additional Director of DCM Financial Services Limited since October 22, 2018 until November 30, 2018. Mr. Deveshwar having 25 years of working experience in area of management and administration with respect to day to day business affairs.
Insufficient data for Shantanu to compare compensation growth.
Insufficient data for Shantanu to establish whether their remuneration is reasonable compared to companies of similar size in India.
Vice President of Operations
Executive of Accounts
Board of Directors Tenure
Average tenure and age of the
DCM Financial Services
board of directors in years:
The average tenure for the DCM Financial Services board of directors is less than 3 years, this suggests a new board.
What Kind Of Shareholders Own DCM Financial Services Limited (NSE:DCMFINSERV)?
Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. … We also tend to see lower insider ownership in companies that were previously publicly owned. … With a market capitalization of ₹21m, DCM Financial Services is a small cap stock, so it might not be well known by many institutional investors.
Should You Be Tempted To Sell DCM Financial Services Limited (NSE:DCMFINSERV) At Its Current PE Ratio?
DCM Financial Services Limited (NSE:DCMFINSERV) trades with a trailing P/E of 58.8x, which is higher than the industry average of 23.1x. … 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. … I will deconstruct the P/E ratio and highlight what you need to be careful of when using the P/E ratio
When DCM Financial Services Limited (NSEI:DCMFINSERV) announced its most recent earnings (31 March 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. … Given that these figures are somewhat myopic, I have calculated an annualized five-year value for DCMFINSERV's earnings, which stands at ₹3.45M This shows that even though earnings growth was negative from the prior year, over the past couple of years, DCM Financial Services's earnings have been rising on average. … Over the past couple of years, DCM Financial Services top-line expansion has overtaken earnings and the growth rate of expenses.
DCM Financial Services Limited does not have significant operations. Previously, the company was engaged in the auto finance business. The company was incorporated in 1991 and is based in New Delhi, India.
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