Discounted Cash Flow Calculation for BSE:512149 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:512149 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
Avance Technologies'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 Avance Technologies 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 Electronic industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Avance Technologies's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Avance Technologies's earnings growth to the India market average as no estimate data is available.
Unable to compare Avance Technologies's revenue growth to the India market average as no estimate data is available.
Unable to determine if Avance Technologies is high growth as no earnings estimate data is available.
Unable to determine if Avance Technologies 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.
Avance Technologies'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
Avance Technologies's finances.
The net worth of a company is the difference between its assets and liabilities.
Avance Technologies's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Avance Technologies's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Avance Technologies'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 1.2x 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. Srikrishna Bhamidipati has been the Managing Director of Avance Technologies Ltd. since October 1, 2014 and serves as its Chairman. He was Compliance Officer of Avance Technologies Ltd until November 23, 2018. Mr. Bhamidipati has been Non-Executive Independent Director of Eco Recycling Limited (also known as Infotrek Syscom Limited) since March 14, 2003. He has been a Director of Avance Technologies Ltd. since January 15, 2002.
Insufficient data for Srikrishna to compare compensation growth.
Insufficient data for Srikrishna to establish whether their remuneration is reasonable compared to companies of similar size in India.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Avance Technologies management team is less than 2 years, this suggests a new team.
Chairman & MD
Chief Financial Officer
Company Secretary & Compliance Officer
Board of Directors Tenure
Average tenure of the
board of directors in years:
The average tenure for the Avance Technologies board of directors is less than 3 years, this suggests a new board.
Avance Technologies Limited engages in trading IT products and peripherals in India. It is involved in the resale of software and hardware products. The company was incorporated in 1985 and is based in Mumbai, India.
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