Discounted Cash Flow Calculation for NSEI:SHREECEM 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:SHREECEM 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
Shree Cement's earnings available for a low price, and how does
this compare to other companies in the same industry?
Shree Cement's earnings are expected to grow by 18.4% yearly, however this is not considered high growth (20% yearly).
Shree Cement's revenue is expected to grow by 14.3% 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.
Shree Cement'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
Mr. Prashant Bangur has been a Joint Managing Director of Shree Cement Limited since February 2, 2016. Mr. Bangur served as an Executive President at Shree Cement Ltd., until February 2, 2016 and served as its an Executive Joint President. He served as Senior Executive Officer at Shree Cement Ltd. He serves as the Chairman of Western India Commercial Co. Ltd., and has been its Director since July 27, 2006. He has been a Director of Shree Capital Services Ltd., since January 2004 and Whole-Time Director of Shree Cement Ltd., since August 21, 2012. He serves as a Director of Ragini Finance Ltd.
Prashant's compensation has increased by more than 20% in the past year.
Prashant'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 tenure for the Shree Cement management team is about average.
Joint MD & Whole-Time Director
MD & Executive Director
Chief Finance Officer
Chief Risk & Compliance Officer and Company Secretary
Senior Vice President of Operations
Vice President of Accounts & Contract Cell
Chief Information Officer- IT & ERP
President of Marketing
Joint President of Material Management
Whole Time Director
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Shree Cement board of directors is over 10 years, this suggests they are a seasoned and experienced board.
How Does Shree Cement Limited's (NSE:SHREECEM) Earnings Growth Stack Up Against Industry Performance?
Were SHREECEM's earnings stronger than its past performances and the industry. … SHREECEM's trailing twelve-month earnings (from 31 March 2018) of ₹14b has. … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 11%, indicating the rate at which SHREECEM is growing has slowed down
Should You Be Impressed By Shree Cement Limited's (NSE:SHREECEM) ROE?
To keep the lesson grounded in practicality, we'll use ROE to better understand Shree Cement Limited (NSE:SHREECEM). … Over the last twelve months Shree Cement has recorded a ROE of 16%. … Return on Equity = Net Profit ÷ Shareholders' Equity
Want To Invest In Shree Cement Limited (NSE:SHREECEM)? Here's How It Performed Lately
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. … How SHREECEM fared against its long-term earnings performance and its industry … SHREECEM's trailing twelve-month earnings (from 31 March 2018) of ₹13.84b has
Shree Cement Limited (NSE:SHREECEM) Investors Are Paying Above The Intrinsic Value
In this article I am going to calculate the intrinsic value of Shree Cement Limited (NSE:SHREECEM). … by estimating the company's future cash flows and discounting them to their present value. … Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model
Can Shree Cement Limited's (NSE:SHREECEM) ROE Continue To Surpass The Industry Average?
and looking to gauge the potential return on investment in Shree Cement Limited (NSE:SHREECEM). … With an ROE of 15.56%, Shree Cement Limited (NSE:SHREECEM) outpaced its own industry which delivered a less exciting 10.30% over the past year. … Sustainability can be gauged by a company’s financial leverage – the more debt it has, the higher ROE is pumped up in the short term, at the expense of long term interest payment burden
You Should Buy Shree Cement Limited (NSE:SHREECEM) Because Of These Reasons
Today I've chosen to put the spotlight on Shree Cement Limited (NSE:SHREECEM) due to its excellent fundamentals in more than one area. … a excellent … Below, I've touched on some key aspects you should know on a high level.
Why Shree Cement Limited (NSE:SHREECEM) Is A Financially Healthy Company
This article will examine SHREECEM’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. … Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn't be too useful, though these low levels of cash means that operational efficiency is worth a look. … Next Steps: Although SHREECEM’s debt level is relatively low, its cash flow levels still could not copiously cover its borrowings.
Will Shree Cement Limited's (NSE:SHREECEM) Earnings Grow Over The Next Year?
In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Shree Cement in the longer term. … View our latest analysis for Shree Cement What can we expect from Shree Cement in the longer term? … NSEI:SHREECEM Future Profit May 10th 18 By 2021, SHREECEM's earnings should reach ₹26.50B, from current levels of ₹13.84B, resulting in an annual growth rate of 20.59%.
Is It Too Late To Buy Shree Cement Limited (NSE:SHREECEM)?
Shree Cement Limited (NSEI:SHREECEM), a basic materials company based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹19104.25 and falling to the lows of ₹16000.75. … Let’s take a look at Shree Cement’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … Furthermore, Shree Cement’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta.
I will touched on some key aspects you should know on a high level, around its financials and growth prospects going forward. … SHREECEM has high near term liquidity, with short term assets (cash and other liquid assets) amply covering upcoming one-year liabilities, as well as long-term commitments. … SHREECEM has managed its cash well at a current level of ₹7.93B.
Shree Cement Limited manufactures and sells cement and clinker in India and internationally. The company operates in two segments, Cement and Power. It offers cement under the Shree Jung Rodhak, Bangur, and Rockstrong brand names. The company also engages in the generation of power with a total capacity of 639.7 megawatts through thermal power and waste heat recovery power plants. Shree Cement Limited was incorporated in 1979 and is based in Kolkata, India.
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