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This document analyzes and evaluates five consumer durable firms in India: Bajaj Electricals, HCL Info Systems, TTK Prestige, Value Industries, and Voltas. It first provides an overview of India's consumer durables market. It then lists the companies under evaluation and describes the calculations used to determine the cost of equity, cost of debt, weighted average cost of capital, and current share price for each company using various financial models. The conclusion compares the calculated current share price to the actual market price for each company to determine if they are over or undervalued.

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Gazal Gupta
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65 views15 pages

Report

This document analyzes and evaluates five consumer durable firms in India: Bajaj Electricals, HCL Info Systems, TTK Prestige, Value Industries, and Voltas. It first provides an overview of India's consumer durables market. It then lists the companies under evaluation and describes the calculations used to determine the cost of equity, cost of debt, weighted average cost of capital, and current share price for each company using various financial models. The conclusion compares the calculated current share price to the actual market price for each company to determine if they are over or undervalued.

Uploaded by

Gazal Gupta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Finance Project On Evaluation OF Consumer Durable Firms

Sumbitted By:(Section c) Team Members Ajay Pratap Singh Ankur agarwal Anil Sharma Nitin Goyal Varun Bansal

TABLE OF CONTENTS

y y y y

OVERVIEW CALCULATIONS WORKING CONCLUSION

Consumer Durables
Overview of Indias Consumer Durables Market The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD players and audio systems etc.) and consumer appliances (also known as white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers. Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs) and introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65 per cent market share in the colour television (CTV) segment. In consonance with the global trend, over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products.

Companies under Evaluation:y y y y y Bajaj Electricals HCL info Systems ltd TTK Prestige Ltd Value Industries Ltd Voltas Ltd

Calculations
Calculation of Cost of equity using CAPM approach

K=Rf +

(Rm- Rf)

K= Cost of Equity Rf = Risk free rate. We assumed it to be 7.6%. Rm= Market rate of return. We computed it using the BSE closing stock data Rm = (SP1- SP0)/ SP0 SP:-Stock Price

= Covariance (m,f) / Variance(m) m:Market price (BSE)


f: Firm price

Calculation of Current Share Price Using Dividend Discount Model P0= (Div (1+g))/(Ke-g) g = Growth Rate = b*r b= Retention Ratio r= Return on Equity

Evaluation of Bonds Calculated current Market Price Using LTP (latest Trading Price) And hence by using IRR function calculated the YTM

Voltas

Value industries

HCL Infosystems Ltd

TTK Industries Ltd

Bajaj Electricals

Conclusion
Sno. Company Name Cost of equity (Ke) Cost of Debt (Kd) WACC Present value of share P0 23.64 Conclusion

Bajaj Electricals

17.089%

10.31%

13.24%

HCL Info systems ltd

19.18%

11.92%

17.96%

76

TTK prestige

17.07%

28.92%

21.13%

497.04

Value Industries

21.089%

3.95%

8.4039%

5.051

Voltas Ltd

19.34%

.86014%

10.0123%

9.61

The Company shares are over valued by : 199.70 The Company shares are over valued by : 40.49 The Company shares are over valued by : 1115.20 The Company shares are over valued by : 4,1486 The Company shares are over valued by : 167.68

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