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Gujarat Craft Industries

BSE:526965
Snowflake Description

Undervalued with proven track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
526965
BSE
₹158M
Market Cap
  1. Home
  2. IN
  3. Materials
Company description

Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally. The last earnings update was 147 days ago. More info.


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  • Gujarat Craft Industries has significant price volatility in the past 3 months.
SHARE PRICE
3 Month History
526965
Industry
5yr Volatility vs Market

Value

 Is Gujarat Craft Industries 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 Gujarat Craft Industries 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 Gujarat Craft Industries is available for.
Intrinsic value
>50%
Share price is ₹32.35 vs Future cash flow value of ₹72.52
Current Discount Checks
For Gujarat Craft Industries to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Gujarat Craft Industries's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Gujarat Craft Industries'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 Gujarat Craft Industries's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Gujarat Craft Industries's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Gujarat Craft Industries is good value based on earnings compared to the IN Packaging industry average.
  • Gujarat Craft Industries is good value based on earnings compared to the IN market.
Price based on expected Growth
Does Gujarat Craft Industries's expected growth come at a high price?
  • Unable to calculate PEG ratio for Gujarat Craft Industries, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Gujarat Craft Industries's assets?
  • Gujarat Craft Industries is good value based on assets compared to the IN Packaging industry average.
X
Value checks
We assess Gujarat Craft Industries'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 Packaging 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 Packaging industry average (and greater than 0)? (1 check)
  5. Gujarat Craft Industries 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 Gujarat Craft Industries 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:
₹121

Terminal Value

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

Terminal Value = ₹45 × (1 + 7%) ÷ (16.62% – 7%)

Terminal value based on the Perpetuity Method where growth (g) = 7%:
₹504

Present value of terminal value:
₹234

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
₹355 = ₹121 + ₹234

Value = Total value / Shares Outstanding (₹355 / 5)

Discount to Share Price

Value per share (INR): ₹72.52

Current discount (share price of ₹32.35): 55.39%



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 = 16.62% = 7% + (1.203 * 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 (₹158,136,505).

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

1.203 = 0.524 (1 + (1- 30%) (185%))

Levered Beta used in calculation = 1.203



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.

Future Performance

 How is Gujarat Craft Industries 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 Gujarat Craft Industries 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

  • Gujarat Craft Industries 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
23.9%
Expected Packaging industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Gujarat Craft Industries expected to grow at an attractive rate?
  • Unable to compare Gujarat Craft Industries's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
  • Unable to compare Gujarat Craft Industries's earnings growth to the IN market average as no estimate data is available.
  • Unable to compare Gujarat Craft Industries'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 Gujarat Craft Industries is high growth as no earnings estimate data is available.
  • Unable to determine if Gujarat Craft Industries 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 Gujarat Craft Industries will efficiently use shareholders’ funds in the future without estimates of Return on Equity.

Next steps:

  1. Examine whether Gujarat Craft Industries is trading at Gujarat Craft Industries'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. Gujarat Craft Industries'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. Gujarat Craft Industries'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 Gujarat Craft Industries'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.
Gujarat Craft Industries 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.

Past Performance

  How has Gujarat Craft Industries 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 Gujarat Craft Industries's growth in the last year to its industry (Packaging).
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.
  • Gujarat Craft Industries's year on year earnings growth rate has been positive over the past 5 years.
  • Gujarat Craft Industries's 1-year earnings growth exceeds its 5-year average (27.5% vs 11.7%)
  • Gujarat Craft Industries's earnings growth has exceeded the IN Packaging industry average in the past year (27.5% vs 12.7%).
Earnings and Revenue History
Gujarat Craft Industries'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.
  • Gujarat Craft Industries has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Gujarat Craft Industries used its assets less efficiently than the IN Packaging industry average last year based on Return on Assets.
  • Gujarat Craft Industries 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 Gujarat Craft Industries'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 Packaging 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.
Gujarat Craft Industries has a total score of 4/6, 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.

Health

 How is Gujarat Craft Industries'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 Gujarat Craft Industries's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Gujarat Craft Industries is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Gujarat Craft Industries's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Gujarat Craft Industries'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 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.
  • Gujarat Craft Industries's level of debt (87.8%) 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 (373.9% vs 87.8% today).
  • Debt is well covered by operating cash flow (23.8%, greater than 20% of total debt).
  • Interest payments on debt are not well covered by earnings (EBIT is 2x annual interest expense, ideally 3x coverage).
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Financial health checks
We assess Gujarat Craft Industries'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. Gujarat Craft Industries 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.

Dividends

 What is Gujarat Craft Industries'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 Gujarat Craft Industries dividends.
If you bought ₹2,000 of Gujarat Craft Industries 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 Gujarat Craft Industries's dividend against the low risk savings benchmark as the company has not reported any payouts.
  • Unable to evaluate Gujarat Craft Industries'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 Gujarat Craft Industries has not reported any payouts.
  • Unable to verify if Gujarat Craft Industries's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Gujarat Craft Industries's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Gujarat Craft Industries 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.
X
Income/ dividend checks
We assess Gujarat Craft Industries'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 Gujarat Craft Industries afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Gujarat Craft Industries 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.

Management

 What is the CEO of Gujarat Craft Industries'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
Ashok Ratanchand Chhajer, image provided by Google.
Ashok Ratanchand Chhajer
COMPENSATION ₹1,320,000
AGE 59
TENURE AS CEO 8.6 years
CEO Bio

Mr. Ashok Ratanchand Kumar Chhajer has been Chairman of the Board and Managing Director of Gujarat Craft Industries Ltd. since October 1, 2009 and its Compliance Officer. Mr. Chhajer serves as a Managing Director of Typhoon Financial Services Limited and has been its Executive Director since November 14, 1995. He served as Compliance Officer of Gujarat Craft Industries Ltd. Mr. Chhajer has been a Director of Gujarat Craft Industries Ltd. since October 1, 2004. He serves as Director of APA Finance Ltd.; Indian Agrotech Ltd.; Woodlands Consultancy Services Pvt. Ltd.; Flora Commerce Pvt. Ltd.; Technomod Properties Pvt. Ltd.; Rishabh Business Pvt. Ltd.; Ethnic Apparels Pvt. Ltd.; Worldwide Impex Pvt. Ltd.; Castle Housing Development Pvt. Ltd. and Bosco Chemtex Pvt. Ltd. Mr. Chhajer served as a Director of Gujarat Raffia Industries Ltd. until April 1, 2006. He is a Commerce Graduate.

CEO Compensation
  • Ashok Ratanchand's compensation has been consistent with company performance over the past year.
  • Ashok Ratanchand's compensation is higher than average for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the Gujarat Craft Industries management team in years:

6.3
Average Tenure
28
Average Age
  • The average tenure for the Gujarat Craft Industries management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Ashok Ratanchand Chhajer

TITLE
Chairman
COMPENSATION
₹1M
AGE
59
TENURE
8.6 yrs

Rishab Chhajer

TITLE
Joint MD & Executive Director
COMPENSATION
₹731K
AGE
28
TENURE
6.3 yrs

Raichand Golchha

TITLE
Chief Financial Officer
COMPENSATION
₹319K
AGE
28
TENURE
3.3 yrs
Board of Directors Tenure

Average tenure and age of the Gujarat Craft Industries board of directors in years:

7.4
Average Tenure
53
Average Age
  • The tenure for the Gujarat Craft Industries board of directors is about average.
Board of Directors

Ashok Ratanchand Chhajer

TITLE
Chairman
COMPENSATION
₹1M
AGE
59
TENURE
8.6 yrs

Rishab Chhajer

TITLE
Joint MD & Executive Director
COMPENSATION
₹731K
AGE
28

Kashyap Mehta

TITLE
Independent Non- Executive Director
COMPENSATION
₹246K
AGE
57
TENURE
18.7 yrs

Anil Kumar Bhandari

TITLE
Independent Non- Executive Director
AGE
49
TENURE
6.3 yrs

Swati Gupta

TITLE
Independent Non Executive Woman Director
TENURE
3.2 yrs
Recent Insider Trading
  • No 3 month insider trading information.
Who owns this company?
X
Management checks
We assess Gujarat Craft Industries'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. Gujarat Craft Industries 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.

News

External News
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Simply Wall St News

Value Stocks Investors Love

Gujarat Craft Industries and Betex India are two of the stocks I have identified as undervalued. … Gujarat Craft Industries Limited (BSE:526965) Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally. … 539400's stock is currently trading at -52% lower than its actual value of INR565.63, at the market price of INR271, based on my discounted cash flow model.

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Company Info

Map
Description

Gujarat Craft Industries Limited manufactures and sells coated woven products in India and internationally. The company also exports its products to approximately 35 countries. It offers flexible intermediate bulk containers/bulk bags; HDPE flexible woven pipes; vermi beds/vermi compost beds; HDPE/PE tarpaulin sheets and covers; plastic sheeting and woven flexible tarpaulin products; polypropylene (PP)/HDPE woven fabrics; PP bags/packaging bags/PP and HDPE woven sacks; and HDPE geomembranes. Gujarat Craft Industries Limited was founded in 1984 and is headquartered in Gandhinagar, India.

Details
Name: Gujarat Craft Industries Limited
526965
Exchange: BSE
Founded: 1984
₹158,136,505
4,888,300
Website: http://www.gujaratcraft.com
Address: Gujarat Craft Industries Limited
431, Santej – Vadsar Road,
Santej,
Gandhinagar,
Gujarat, 382721,
India
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
BSE 526965 Equity Shares Mumbai Stock Exchange IN INR 03. Oct 2007
Number of employees
Current staff
Staff numbers
115
Gujarat Craft Industries employees.
Industry
Paper Packaging
Materials
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/05/27 09:29
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.