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Ashiana Ispat

BSE:513401
Snowflake Description

Undervalued with adequate balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
513401
BSE
₹200M
Market Cap
  1. Home
  2. IN
  3. Materials
Company description

Ashiana Ispat Limited manufactures and sells steel products for construction, engineering, automotive, and infrastructure sectors in India. The last earnings update was 147 days ago. More info.


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  • Ashiana Ispat has significant price volatility in the past 3 months.
SHARE PRICE
3 Month History
513401
Industry
5yr Volatility vs Market

513401 Value

 Is Ashiana Ispat undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Ashiana Ispat to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

Current Discount
Amount off the current price Ashiana Ispat is available for.
Intrinsic value
>50%
Share price is ₹25.05 vs Future cash flow value of ₹51.15
Current Discount Checks
For Ashiana Ispat to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Ashiana Ispat's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Ashiana Ispat'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 Ashiana Ispat's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Ashiana Ispat's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Ashiana Ispat is good value based on earnings compared to the IN Metals and Mining industry average.
  • Ashiana Ispat is good value based on earnings compared to the IN market.
Price based on expected Growth
Does Ashiana Ispat's expected growth come at a high price?
  • Unable to calculate PEG ratio for Ashiana Ispat, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Ashiana Ispat's assets?
  • Ashiana Ispat is good value based on assets compared to the IN Metals and Mining industry average.
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Value checks
We assess Ashiana Ispat's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Metals and Mining industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Metals and Mining industry average (and greater than 0)? (1 check)
  5. Ashiana Ispat has a total score of 5/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (0%).

    Full details on the Value part of the Simply Wall St company analysis model.
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Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Ashiana Ispat is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
₹237

Terminal Value

Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = ₹72 × (1 + 7%) ÷ (23% – 7%)

Terminal value based on the Perpetuity Method where growth (g) = 7%:
₹481

Present value of terminal value:
₹171

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
₹407 = ₹237 + ₹171

Value = Total value / Shares Outstanding (₹407 / 8)

Discount to Share Price

Value per share (INR): ₹51.15

Current discount (share price of ₹25.05): 51.03%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 23% = 7% + (2 * 8%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (₹199,518,240).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

2.176 = 0.879 (1 + (1- 30%) (210.76%))

Levered Beta used in calculation = 2



Assumptions
  1. The risk free rate of 7% is from the 10 year government bond rate in INR.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (8%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

513401 Future Performance

 How is Ashiana Ispat expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

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 Ashiana Ispat 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

  • Ashiana Ispat is not covered by any analysts.
The future performance of a company is measured in the same way as past performance, by looking at estimated growth 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 it right!
Annual Growth Rate
14.6%
Expected Metals and Mining industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Ashiana Ispat expected to grow at an attractive rate?
  • Unable to compare Ashiana Ispat's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
  • Unable to compare Ashiana Ispat's earnings growth to the IN market average as no estimate data is available.
  • Unable to compare Ashiana Ispat's revenue growth to the IN market average as no estimate data is available.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Unable to determine if Ashiana Ispat is high growth as no earnings estimate data is available.
  • Unable to determine if Ashiana Ispat 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.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Unable to establish if Ashiana Ispat will efficiently use shareholders’ funds in the future without estimates of Return on Equity.

Next steps:

  1. Examine whether Ashiana Ispat is trading at Ashiana Ispat'san attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
  2. Ashiana Ispat's future outlook can be gauged by looking at industry trends and market size, and determining how well-positioned the company is compared to its competitors. Take a look at other high-growth Materials companies here
  3. Ashiana Ispat's competitive advantages and company strategy can generally be found in its financial reports archived here.
  4. Use fundamentals to screen for another stock to analyse from our database of over 75,000 companies worldwide
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Future performance checks
We assess Ashiana Ispat's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the IN market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the IN market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Ashiana Ispat has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

513401 Past Performance

  How has Ashiana Ispat performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Ashiana Ispat's growth in the last year to its industry (Metals and Mining).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Ashiana Ispat's year on year earnings growth rate has been positive over the past 5 years.
  • Ashiana Ispat's 1-year earnings growth exceeds its 5-year average (21.4% vs 3.4%)
  • Ashiana Ispat's earnings growth has not matched the IN Metals and Mining industry average in the past year (21.4% vs 49.3%).
Earnings and Revenue History
Ashiana Ispat's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Ashiana Ispat has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Ashiana Ispat used its assets less efficiently than the IN Metals and Mining industry average last year based on Return on Assets.
  • Ashiana Ispat has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
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Past performance checks
We assess Ashiana Ispat's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Metals and Mining industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. 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.
Ashiana Ispat has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

513401 Health

 How is Ashiana Ispat's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Ashiana Ispat's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Ashiana Ispat is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Ashiana Ispat's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Ashiana Ispat'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 checks below.
Assets
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 2.2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, 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.
  • Ashiana Ispat's level of debt (118.6%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (250.8% vs 118.6% today).
  • Debt is well covered by operating cash flow (30.1%, greater than 20% of total debt).
  • Interest payments on debt are not well covered by earnings (EBIT is 1.9x annual interest expense, ideally 3x coverage).
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Financial health checks
We assess Ashiana Ispat's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Ashiana Ispat has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

513401 Dividends

 What is Ashiana Ispat's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Ashiana Ispat dividends.
If you bought ₹2,000 of Ashiana Ispat shares you are expected to receive ₹0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Ashiana Ispat's dividend against the low risk savings benchmark as the company has not reported any payouts.
  • Unable to evaluate Ashiana Ispat's dividend against the market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Unable to perform a dividend volatility check as Ashiana Ispat has not reported any payouts.
  • Unable to verify if Ashiana Ispat's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Ashiana Ispat's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Ashiana Ispat has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
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Income/ dividend checks
We assess Ashiana Ispat's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Ashiana Ispat afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Ashiana Ispat has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

513401 Management

 What is the CEO of Ashiana Ispat's salary, the management and board of directors tenure and is there insider trading?

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.
CEO
Puneet Jain, image provided by Google.
Puneet Jain
COMPENSATION ₹4,490,000
AGE 42
TENURE AS CEO 1.9 years
CEO Bio

Mr. Puneet Kumar Jain has been Managing Director of Ashiana Ispat Ltd since June 1, 2016 and serves as its Whole Time Director. Mr. Jain has been involved with iron and steel industry since the beginning of his career. For the past 16 years, he has been instrumental in the development and production of high quality of steel, their processing, improvement in their properties and preparation of specifications for their usage. Mr. Jain has also assisted in marketing and brand building of the products. He has also substantial expertise and training in organizational psychology, management of organizations and recruitment, training and retention of staff.

CEO Compensation
  • Puneet's compensation has increased by more than 20% in the past year.
  • Puneet's compensation is higher than average for a company of this size and profit level.
Management Team

Naresh Jain

TITLE
Chairman of the Board
COMPENSATION
₹20K
AGE
63

Puneet Jain

TITLE
MD & Whole Time Director
COMPENSATION
₹4M
AGE
42
TENURE
1.9 yrs

Harun Ansari

TITLE
Compliance Officer & Company Secretary
COMPENSATION
₹258K
Board of Directors

Naresh Jain

TITLE
Chairman of the Board
COMPENSATION
₹20K
AGE
63

Puneet Jain

TITLE
MD & Whole Time Director
COMPENSATION
₹4M
AGE
42

Tarachand Kansal

TITLE
Non-Executive & Independent Director
COMPENSATION
₹18K

Ram Garg

TITLE
Non-Executive & Independent Director
COMPENSATION
₹14K

Rajesh Pal

TITLE
Non-Executive & Independent Director
COMPENSATION
₹18K

Shruti Jain

TITLE
Non-Executive & Independent Director
COMPENSATION
₹18K
TENURE
3.2 yrs
Recent Insider Trading
  • No 3 month insider trading information.
Who owns this company?
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Management checks
We assess Ashiana Ispat's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Ashiana Ispat has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

513401 News

External News
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Simply Wall St News

Ashiana Ispat And Other Top Undervalued Stocks

Ashiana Ispat and Gujarat Craft Industries are two of the companies on my list that I consider are undervalued. … What’s even more appeal is that 513401’s PE ratio stands at around 4.76x relative to its Metals and Mining peer level of, 18.85x suggesting that relative to other stocks in the industry, 513401’s shares can be purchased for a lower price. … BSE:513401 PE PEG Gauge May 15th 18 Gujarat Craft Industries Limited (BSE:526965) Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally.

Simply Wall St -

Cheap Stocks To Watch Out For In April

Ashiana Ispat and Gujarat Craft Industries are stocks on my list that are potentially undervalued. … BSE:513401 PE PEG Gauge Apr 14th 18 Gujarat Craft Industries Limited (BSE:526965) Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally. … In terms of relative valuation, 526965’s PE ratio is trading at 11.68x relative to its Packaging peer level of, 19.74x indicating that relative to its competitors, you can buy 526965’s shares at a cheaper price.

Simply Wall St -

Best-In-Class Undervalued Stocks

In terms of relative valuation, 513401’s PE ratio is trading at 4.54x against its its Metals and Mining peer level of, 20.09x suggesting that relative to its comparable company group, you can buy 513401’s shares at a cheaper price. … BSE:513401 PE PEG Gauge Mar 14th 18 Gujarat Craft Industries Limited (BSE:526965) Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally. … Also, 526965’s PE ratio is currently around 10.41x while its Packaging peer level trades at, 18.51x meaning that relative to its comparable company group, 526965 can be bought at a cheaper price right now.

Simply Wall St -

January Top Cheap Stock To Invest In

Ashiana Ispat and Chemo Pharma Laboratories may be trading at prices below their likely values. … BSE:513401 PE PEG Gauge Jan 24th 18 Chemo Pharma Laboratories Limited (BSE:506365) Chemo Pharma Laboratories Limited does not have significant operations. … BSE:506365 PE PEG Gauge Jan 24th 18 Chartered Capital and Investment Limited (BSE:511696) Chartered Capital and Investment Limited provides consultancy and merchant banking services in India.

Simply Wall St -

513401 Company Info

Map
Description

Ashiana Ispat Limited manufactures and sells steel products for construction, engineering, automotive, and infrastructure sectors in India. The company offers TMT and CTD bars. The company was founded in 1992 and is based in New Delhi, India.

Details
Name: Ashiana Ispat Limited
513401
Exchange: BSE
Founded: 1992
₹199,518,240
7,964,800
Website: http://www.ashianaispat.in
Address: Ashiana Ispat Limited
908-910, Pearl Best Height-II,
Netaji Subhash Place,
New Delhi,
Delhi, 110034,
India
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
BSE 513401 Equity Shares Mumbai Stock Exchange IN INR 23. May 2005
Number of employees
Current staff
Staff numbers
132
Ashiana Ispat employees.
Industry
Steel
Materials
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/05/27 09:32
End of day share price update: 2018/05/25 00:00
Last earnings update: 2017/12/31
Last annual earnings update: 2017/03/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.