A PART OF THE LEARN2I
INPUTS Source
Shares Outstanding 20000 Balance Sheet
Working Capital Discount Factor 2.00% Historic Growth in WC Change
Working Capital Change 2000 CashFlow Statement
Capital Expenditure (CapEx) 5000 Balance Sheet
Tax 30% Annual Report (Corporate Tax Rate)
Years 5 Personal Assumption
Revenue/Sales 200000 P/L Statement
Depreciation 2000 P/L Statement
Stock Price Marekt Price 50 Current Market Price
EBITDA 100000 P/L Statement
CAGR 10% Industry Growth Rate (Annual Report)
Terminal Value 7.00% Indian GDP
Discount Factor 10.45% Weighted Average Cost Of Capital
Year 0 1 2
Sales 200000 220000 242000
EBITDA 100000 110000 121000
Less: Dep 2000 2200 2420
EBIT 98000 107800 118580
Less: Tax 29400 32340 35574
EBIT(1-T) 68600 75460 83006
Add: Dep 2000 2200 2420
Less: CapEx 5000 5500 6050
Less: Working Capital Change 2000 2040 2080.8
Free Cash Flow to the Firm (FCFF) 63600 70120 77295.2
Present Value of FCFF 63485.74 52040.89
PART OF THE LEARN2INVEST SERIES BY VIVEK BAJAJ
Assumptions
Particulars Units Assumptions
Input Values in Grey Source
Equity % 50.0%
cells Only
Debt % 50.0%
Tax Rate % 30.0%
Annual Interest Rate % 9.0% Bank rate
Risk Free Rate (Rf) % 6.5% Relevant country Rf Interest Rate
Market Risk Premium % 8.1% Market Rate
Beta No. 1.00 Relevant Industry
Cost of Equity % 14.60%
Cost Of Debt % 6.30%
WACC % 10.45000% Weighted Average Cost Of Capital
3 4 5
266200 292820 322102
133100 146410 161051.00
2662 2928.2 3221.02
130438 143481.8 157829.98
39131.4 43044.54 47348.99
91306.6 100437.26 110480.99
2662 2928.2 3221.02
6655 7320.5 8052.55
2122.42 2164.86 2208.16
85191.18 93880.10 103441.29
47117.15 42659.26 38623.14
Terminal Value 2998298.39
Present Value of Terminal Value 1824089.95
Total PV of FCFF 243926.18
Equity Value of Firm 2068016.13371642
Stock Price True Value 103.40
Stock Price is Undervalued by 53.40
A PART OF THE LEA
DIVIDEND DISCO
Input/Output
Particulars Units Assumptions
D1 INR ₹ 10.00
r % 14.6%
g % 8.0%
Risk Free Rate (Rf) % 6.5%
Market Risk Premium % 8.1%
Beta No. 1.00
Cost of Equity % 14.60%
Vo INR ₹ 151.52
A PART OF THE LEARN2INVEST SERIES BY VIVEK BAJAJ
DIVIDEND DISCOUNT MODEL - GORDON GROWTH
Source
Expected dividend at year end (Use historic dividend payout growth rate as calculation for expec
Cost of Equity/ Expected return on equity
Divident growth rate in perpetuity (Use historic growth rate)
Relevant country Rf Interest Rate
Market Rate ([Link]/India equity risk premium)
Relevant Industry
Fair Price of Stock
A PART OF THE LEARN2I
RELATIVE VALU
Input/Output
Particulars Units Assumptions
Current P/E No. 13.33
EPS INR 3.00
Current Stock Price INR 40.00
Comparable Stock 1 INR 50.00
EPS 1 4.00
Comparable Stock 1 INR 75.00
EPS 2 5.00
Comparable Stock 1 INR 80.00
EPS 3 4.00
Comparable Stock 1 INR 55.00
EPS 4 3.00
Comparable Stock 1 INR 40.00
EPS 5 2.00
Industry Average P/E No. 17.17
Fair Value Stock Price INR 51.50
Fair Valuation Difference INR ₹ 11.50
A PART OF THE LEARN2INVEST SERIES BY VIVEK BAJAJ
RELATIVE VALUE MODEL (P/E Ratio)
Source
Price/Earnings Ratio
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
StockEdge
Average P/E of Comparable Stocks
Industry Average P/E *EPS
Under Valued Stock if "+", Over Valued Stock if "-"