Discounted Cash Flow Calculation for NSEI:XCHANGING 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:XCHANGING 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
Xchanging Solutions's earnings available for a low price, and how does
this compare to other companies in the same industry?
Xchanging Solutions's earnings are expected to grow by 13.3% yearly, however this is not considered high growth (20% yearly).
Unable to determine if Xchanging Solutions 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.
Xchanging Solutions'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.
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
Xchanging Solutions's finances.
The net worth of a company is the difference between its assets and liabilities.
Xchanging Solutions is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Xchanging Solutions's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Xchanging Solutions'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.
Low level of unsold assets.
Debt is covered by short term assets, assets are 2412.8x debt.
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. Chandrasekhara Rao Boddoju has been Chief Executive Officer, Managing Director and Executive Director of Xchanging Solutions Ltd since August 9, 2018. He has experience of over 27 years in IT services industry, played leadership
roles spanning Software development, Project and Program management, Global delivery, Pre-Sales & Digital
Solutions, Account management and SBU P&L management. For the past 13+ years at DXC Technology Company (previously CSC), he has led the setup and growth of multiple
customer engagements from NA, Europe and AMEA regions, turned around a number of customer accounts and
business units for improved profit and growth and as well managed some ofthe acquisitions / integrations by CSC
at India. Currently heading Xchanging AES business (Xchanging Solutions Limited and its subsidiaries as well as Xchanging
Technology Services India Private Limited mainly) as P&L head [Sell and Deliver responsibility), for the last couple
of years. Prior to joining DXC Technology Company, he worked for 10 years at Wipro Technologies and was part of delivery
and account leadership for Telecom and Manufacturing verticals & led a number of strategic customer accounts
to growth. He understands the IT services business extremely well, played diverse types of roles —
both in the Delivery,
Sales/Solutions and P&L management for a number of customer accounts and business units at Wipro and DXC,
has exposure to working with the global customers. He is well versed working with business enabling functions
such as Sales, Finance, HR, etc. He holds Masters degree in Computer Science & Engineering & Bachelors degree in Mechanical engineering. He is
also alumni of IIM-Calcutta.
Insufficient data for Chandrasekhara to compare compensation growth.
Insufficient data for Chandrasekhara to establish whether their remuneration is reasonable compared to companies of similar size in India.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Xchanging Solutions management team is less than 2 years, this suggests a new team.
CFO & Whole Time Director
CEO, MD & Executive Director
Founder & Director
Managing Director and Chief Operating Officer of BPO Division - Americas
President of Government Division
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Xchanging Solutions board of directors is less than 3 years, this suggests a new board.
Is Xchanging Solutions Limited's (NSE:XCHANGING) ROE Of 8.2% Concerning?
With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … That means that for every ₹1 worth of shareholders' equity, it generated ₹0.082 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Xchanging Solutions Limited (NSE:XCHANGING): What Are Investors Earning On Their Capital?
Your equity share is granted in return for the capital provided to the business to operate, and in order for an investment to be successful the business has to create earnings from the funds that make up this capital. … To understand Xchanging Solutions’s capital returns we will look at a useful metric called return on capital employed. … What is Return on Capital Employed (ROCE)?
With An ROE Of 8.25%, Has Xchanging Solutions Limited's (NSE:XCHANGING) Management Done Well?
Xchanging Solutions Limited (NSE:XCHANGING) delivered a less impressive 8.25% ROE over the past year, compared to the 12.63% return generated by its industry. … Knowing these components can change your views on XCHANGING's below-average returns. … Today I will look at how components such as financial leverage can influence ROE which may impact the sustainability of XCHANGING's returns
Does Xchanging Solutions Limited's (NSE:XCHANGING) PE Ratio Warrant A Buy?
The content of this article will benefit those of you who are starting to educate yourself about investing in the stock market. … and want to learn about the link between company’s fundamentals and stock market performance. … While this makes XCHANGING appear like a great stock to buy, you might change your mind after I explain the assumptions behind the P/E ratio.
What Investors Should Know About Xchanging Solutions Limited's (NSE:XCHANGING) Financial Strength
Xchanging Solutions Limited (NSE:XCHANGING), which has zero-debt on its balance sheet, can maximize capital returns by increasing debt due to its lower cost of capital. … Is XCHANGING right in choosing financial flexibility over lower cost of capital … There are well-known benefits of including debt in capital structure, primarily a lower cost of capital.
Does Xchanging Solutions Limited's (NSE:XCHANGING) -44.93% Earnings Drop Reflect A Longer Term Trend?
Given that these values may be somewhat short-term, I’ve estimated an annualized five-year value for Xchanging Solutions's net income, which stands at ₹1.41B This doesn't look much better, as earnings seem to have consistently been diminishing over time. … Although revenue growth over the past couple of years, has been negative, earnings growth has been falling by even more, suggesting that Xchanging Solutions has been ramping up its expenses. … I recommend you continue to research Xchanging Solutions to get a better picture of the stock by looking at: Financial Health: Is XCHANGING’s operations financially sustainable?
What You Must Know About Xchanging Solutions Limited's (NSE:XCHANGING) Return on Equity
Check out our latest analysis for Xchanging Solutions Breaking down Return on Equity Firstly, Return on Equity, or ROE, is simply the percentage of last years’ earning against the book value of shareholders’ equity. … Return on Equity = Net Profit ÷ Shareholders Equity ROE is measured against cost of equity in order to determine the efficiency of Xchanging Solutions’s equity capital deployed. … Currently Xchanging Solutions has virtually no debt, which means its returns are predominantly driven by equity capital.
Xchanging Solutions Limited provides information technology services in India, the United States, Europe, and internationally. The company was formerly known as Cambridge Solutions Limited and changed its name to Xchanging Solutions Limited in June 2012. Xchanging Solutions Limited was incorporated in 2002 and is based in Bengaluru, India. Xchanging Solutions Limited is a subsidiary of Xchanging (Mauritius) Limited.
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