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    Pravin Amirth
    The document provides financial information and analysis for DCM Industries. Key details include: - The company's enterprise valuation is Rs. 68.59 crores based on a DCF model valuation of Rs. 187.41 per share. - Gross profit margins, revenue growth, EPS, debt levels, inventory levels, receivables, cash flow, and return on equity are evaluated based on comments about signs of competitive advantage, consistency, leverage, and financial health. - A DCF model valuation ranges from Rs. 168.7 to 206.1 crores based on a 10% error rate, using 10 year cash flow projections, growth rates, and a 9.386% discount rate.

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    Untitled

    Uploaded by

    Pravin Amirth
    14 views8 pages
    The document provides financial information and analysis for DCM Industries. Key details include: - The company's enterprise valuation is Rs. 68.59 crores based on a DCF model valuation of Rs. 187.41 per share. - Gross profit margins, revenue growth, EPS, debt levels, inventory levels, receivables, cash flow, and return on equity are evaluated based on comments about signs of competitive advantage, consistency, leverage, and financial health. - A DCF model valuation ranges from Rs. 168.7 to 206.1 crores based on a 10% error rate, using 10 year cash flow projections, growth rates, and a 9.386% discount rate.

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    The document provides financial information and analysis for DCM Industries. Key details include: - The company's enterprise valuation is Rs. 68.59 crores based on a DCF model valuation of Rs. 187.41 per share. - Gross profit margins, revenue growth, EPS, debt levels, inventory levels, receivables, cash flow, and return on equity are evaluated based on comments about signs of competitive advantage, consistency, leverage, and financial health. - A DCF model valuation ranges from Rs. 168.7 to 206.1 crores based on a 10% error rate, using 10 year cash flow projections, growth rates, and a 9.386% discount rate.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    14 views8 pages

    Untitled

    Uploaded by

    Pravin Amirth
    The document provides financial information and analysis for DCM Industries. Key details include: - The company's enterprise valuation is Rs. 68.59 crores based on a DCF model valuation of Rs. 187.41 per share. - Gross profit margins, revenue growth, EPS, debt levels, inventory levels, receivables, cash flow, and return on equity are evaluated based on comments about signs of competitive advantage, consistency, leverage, and financial health. - A DCF model valuation ranges from Rs. 168.7 to 206.1 crores based on a 10% error rate, using 10 year cash flow projections, growth rates, and a 9.386% discount rate.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 8

    company DCM INDUSTRIES

    dcf 187.408877434164
    enterprise valuation 68.5975052716047

    variable value comment

    gross profit margin (gpm) or OPM 7% >20%

    in line with gross


    Revenue growth cyclical profit growth
    EPS should be
    consistent with the
    EPS cyclical net profits

    company should
    not be highly
    debt level leveraged

    applicable for
    manufacturing
    inventory companies

    sales backed by
    receivables is not a
    sales Vs receivables great sign

    cash flow from operations has to be positive

    return on equity >25%


    1 or 2 simple
    Business diversity business lines

    subsidiary not many


    what does it signify
    higher the margin, higher is the evidence of a sustainable moat(moat is the companys competitive
    advantage

    Revenue growth should be inline with the profit growth

    if a company is diluting its equity then it is not good for its shareholders

    High debt means the company is operating on high leverage.plus finance cost eats away the
    earnings.if debt is there check interest coverage ratio

    a growing inventory along with a growing PAT margin is a good sign.Always check the inventory
    number of days

    this shows that company is just pushing products to show revenue growth

    if the company is not generating cash from operations then it indicates operating stress
    higher the ROE better it is for the investor however make sure you check the debt levels along with
    this.debt increases ROE(use dupont method)
    avoid companies that have multiple business interests.Stick to companies that operate in 1 or 2
    segments

    if there are too many subsidiaries then it could be a sign of the company siphoning off money .Be
    cautious while investing in such companies
    The Discounted Cash Flow (DCF) Model
    Module 3, Chapter 15
    Version 1.0

    Free Cash Flow Estimate (In INR Crs)


    2018 - 19 2019- 20

    Net cash from Operating Activities 83.7 37.9


    Capital Expenditures 88.5 75.1
    Free Cash Flow (FCF) (4.8) (37.2)
    3 Year Average Free Cash flow

    Inputs
    Number of years considered 10
    FCF Growth rate for first 5 years 18%
    FCF Growth rate for last 5 years 10%
    Terminal Growth Rate 3.50%
    Discount Rate 9.386%

    Intrinsic Value Calculation (INR Crs, unless indicated)


    Total PV of cash flow 1,689.16
    Total Debt 115.07 BS-LONG TERM BORROWING
    BS-CURRENT ASSETS -CASH N
    Cash & Cash Balance 32.00 BANK BALANCE
    Net Debt 83.07
    Share Capital 17.14
    Face Value (INR) 2.00
    Number of Shares 85,700,000
    Share Price (INR) 187.41

    Intrinsic Value Band


    Model Error leeway 10%
    Lower Intrinsic value band 168.7
    Upper Intrinsic value band 206.1

    Disclaimer – This DCF model is for educational purpose only.


    2020- 21

    net cash from operating activities from cash flow


    225.3 statement
    57.0 CASH FLOW -INVESTING ACTIVITY-PURCHASE OF TANGIBLE
    168.3
    42.1

    Cash flow & Present Value Table


    Sl No Year Cash flow PV of Cash flow
    1 2014 - 15 49.64 45.38
    2 2015 - 16 58.57 48.95
    3 2016 - 17 69.12 52.81
    4 2017 - 18 81.56 56.97
    5 2018 - 19 96.24 61.45
    6 2019 - 20 105.86 61.80
    7 2020 - 21 116.45 62.14
    8 2021 - 22 128.09 62.49

    9 2022 - 23 140.90 62.84


    10 2023 - 24 154.99 63.19

    Terminal Year 2023 - 24


    Terminal Value 2,725.23
    PV of Terminal Value 1,111.14
    company name 21 20 19 18 17 16

    Enterprise value (cr.) 708.58 675.05 734.51 723.65 913.41 from money control balanc
    EBITDA 168.70952381 168.34165 135.26888 116.1557 208.5411
    EV/EBITDA(X) 4.2 4.01 5.43 6.23 4.38
    Growth in EBITDA 0.2185305 24.449652 16.454792 -44.30081
    Average 3 yrs growth in EBITDA -0.794459
    EXPECTED EBITDA 167.3692
    FORCASTED EV 587.88062
    SHARES OUTSTANDING 8.57 in crores
    TARGET PRICE 68.597505
    ENTRY PRICE 51.448129
    from money control balanc sheet

    DEBT
    115.07

    1030027
    company name

    cost of Debt calculation


    interest expense 39.74 MONEY CONTROL BALANCE SHEET & INCOME STATEMENT
    ST Debt 298.61
    LT Debt 115.07
    cost of Debt 9.61%
    Income tax expense 34.1
    income before tax 99.99
    Effective tax rate 34.10%
    cost of debt*(1-T) 6.33%

    cost of equity calculation


    RISK FREE RATE 6.88% 10 YEAR BOND RATE
    BETA 1.51 MONEY CONTROL
    MARKET RETURN 9.40% 20YEAR STOCK MARKET RETURN
    COST OF EQUITY 10.69%

    WEIGHT OF DEBT & EQUITY CALCULATION


    TOTAL DEBT 413.68 29.83% WEIGHT OF DEBT
    MARKET CAP 973 70% WEIGHT OF EQUITY
    TOTAL 1386.68

    WACC CALCULATION
    WACC 9.39%
    & INCOME STATEMENT

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