Discounted Cash Flow Calculation for BSE:530713 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.
BSE:530713 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
Ajel'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 Ajel 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 IT industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Ajel's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Ajel's earnings growth to the India market average as no estimate data is available.
Unable to compare Ajel's revenue growth to the India market average as no estimate data is available.
Unable to determine if Ajel is high growth as no earnings estimate data is available.
Unable to determine if Ajel 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.
Ajel'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
0/6, 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. Srinivasa Reddy Arikatla serves as Managing Director of Ajel Infotech Ltd. since October 1, 2008 and its Chairman since August 29, 2012. Mr. Arikatla served as Vice Chairman of Ajel Infotech Ltd. from October 1, 2008 to August 29, 2012. He serves as Chairman and Managing Director of Ajel Limited since February 14, 2018.
Insufficient data for Srinivasa to compare compensation growth.
Srinivasa's remuneration is lower than average for companies of similar size in India.
MD, Chairman & Executive Director
Chief Financing Officer
Whole Time Executive Director
Company Secretary & Compliance Officer
Delivery Head of IT Solution
Board of Directors Tenure
Average tenure of the
board of directors in years:
The average tenure for the Ajel board of directors is less than 3 years, this suggests a new board.
Ajel Limited provides IT consulting and software development services in the United States and India. The company offers Dynamic Enterprise Management, a professional services business management solution that provides financial and operational functionality, such as consultant resource management, business intelligence, reporting, payroll, human resource management system, and financials and Sales Force automation to growing and midsize organizations. It also provides infrastructure management, professional, network, and application development and management services; enterprise solutions; cloud computing; and business intelligence and analytics services. The company serves commercial and public sectors and utility companies. Ajel Limited was founded in 1994 and is headquartered in Mumbai, India.
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