Description
Valuation of NTPC
Industry: Power Sector Company: NTPC
Date:
From Capitaline, following information and ratios of NTPC are extracted which will be tested with various valuation techniques. P/E P/BV EV/EBITDA Latest share price data Beta 18.52 2.34 11.16 169.1 0.7995
Various techniques have been used to value the company and arrive at the share price and study different ratios (P/E multiple and EV multiple).
CALCULATION OF SHARE PRICE USING REGRESSION ON MARKET RETURN TAKING INTO ACCOUNT STOCK SPLITS AND DIVIDEND PAYOUTS
Risk free rate No. of period Tim e peri od Ind ex 8.50% 53 Risk premium for stocks= Riskfree rate during period = DPS ( Stock ) Sp lit F ac to r 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Index Level 5.50% 8.50% Current stock price Current Annual DPS (R(jt)Rj)^2 $170.25 $0.00
Price (Stock)
Return (Stock)
Return (Mkt)
(R(mt)R(m))^2
(R(jt)-R(j))
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
175.9 172.2 166.3 162.05 158.25 159.55 156.95 158.65 156.65 155.75 156.4 162.8 165.25 169.25 169.95 172.65 173.7 174.4 177.75 179.55 178 176.05 177.6 179.35
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
16,805.33 16,846.83 16,483.45 16,123.46 16,008.34 16,167.13 15,695.43 15,858.49 15,699.97 16,065.42 15,946.10 16,371.51 16,461.71 16,775.87 16,882.67 17,118.74 17,192.82 17,362.10 17,569.53 17,562.61 17,481.93 17,464.85 17,480.83 17,705.01
-2.10% -3.43% -2.56% -2.34% 0.82% -1.63% 1.08% -1.26% -0.57% 0.42% 4.09% 1.50% 2.42% 0.41% 1.59% 0.61% 0.40% 1.92% 1.01% -0.86% -1.10% 0.88% 0.99%
0.25% -2.16% -2.18% -0.71% 0.99% -2.92% 1.04% -1.00% 2.33% -0.74% 2.67% 0.55% 1.91% 0.64% 1.40% 0.43% 0.98% 1.19% -0.04% -0.46% -0.10% 0.09% 1.28%
0.0008695 0.0018245 0.0011565 0.0010177 5.615E-08 0.0006124 5.663E-06 0.0004434 0.0002016 1.831E-05 0.0010542 4.352E-05 0.0002482 1.863E-05 5.528E-05 5.618E-06 1.955E-05 0.0001157 2.805E-06 0.0002919 0.0003766 1.243E-07 1.965E-06
4.967E-06 0.0004757 0.0004875 5.447E-05 9.367E-05 0.0008654 0.000103 0.0001048 0.0005307 5.88E-05 0.0006989 2.776E-05 0.0003551 3.752E-05 0.0001888 1.67E-05 9.226E-05 0.000137 4.027E-07 2.337E-05 1.483E-06 4.546E-07 0.0001583
(R(mt)-R(m)) -6.572E-05 0.0009316 0.0007509 0.0002355 -2.293E-06 0.000728 2.415E-05 0.0002156 -0.000327 3.281E-05 0.0008584 3.476E-05 0.0002969 -2.644E-05 0.0001022 -9.686E-06 -4.247E-05 0.0001259 -1.063E-06 8.26E-05 2.363E-05 2.377E-07 1.764E-05
1
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0
178.6 174.25 173.6 171.15 169.25 171.4 171.9 168.45 168.45 173 173.7 177.1 176.45 170.5 166.6 163.9 163.95 164.7 167.25 168.4 168.15 165.5 163.75 166.45 165.7 172.85 171.9 169 172 164.2 163.7 163.3 162.1 163.4 166.1 167.4
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
17,804.80 17,288.83 17,254.86 16,939.28 16,785.64 16,936.89 17,085.34 16,748.29 17,025.09 17,082.69 16,883.92 16,958.39 16,536.47 16,557.23 16,232.54 15,792.41 15,864.86 16,151.45 16,453.76 16,698.07 16,446.02 16,524.03 16,051.10 16,162.06 16,361.15 17,065.15 17,099.28 16,745.35 16,933.83 16,876.54 16,709.60 16,467.44 16,501.74 16,866.97 17,165.54 17,065.00
-0.42% -2.44% -0.37% -1.41% -1.11% 1.27% 0.29% -2.01% 0.00% 54.05% 0.40% 1.96% -0.37% -3.37% -2.29% -1.62% 0.03% 0.46% 1.55% 0.69% -0.15% -1.58% -1.06% 1.65% -0.45% 4.32% -0.55% -1.69% 1.78% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
0.56% -2.90% -0.20% -1.83% -0.91% 0.90% 0.88% -1.97% 1.65% 0.34% -1.16% 0.44% -2.49% 0.13% -1.96% -2.71% 0.46% 1.81% 1.87% 1.48% -1.51% 0.47% -2.86% 0.69% 1.23% 4.30% 0.20% -2.07% 1.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
0.0001596 0.0010764 0.0001484 0.0005092 0.0003823 1.807E-05 3.063E-05 0.0008135 7.143E-05 0.2830928 1.941E-05 0.0001237 0.0001469 0.0017785 0.0009813 0.000608 6.637E-05 1.503E-05 4.943E-05 2.483E-06 9.873E-05 0.0005862 0.000362 6.459E-05 0.0001679 0.001204 0.0001945 0.0006412 8.648E-05 0 0 0 0 0 0 0
2.911E-05 0.0008538 4.865E-06 0.0003434 8.669E-05 7.691E-05 7.266E-05 0.0003987 0.0002652 9.875E-06 0.0001411 1.739E-05 0.000631 1.03E-06 0.0003941 0.0007483 1.89E-05 0.0003177 0.0003414 0.0002134 0.0002352 2.027E-05 0.000833 4.452E-05 0.0001459 0.0018308 3.095E-06 0.0004385 0.0001213 0 0 0 0 0 0 0
-6.816E-05 0.0009586 2.687E-05 0.0004181 0.0001821 3.728E-05 -4.718E-05 0.0005695 -0.0001376 0.001672 5.232E-05 4.638E-05 0.0003045 -4.279E-05 0.0006218 0.0006745 -3.541E-05 -6.911E-05 0.0001299 -2.302E-05 0.0001524 -0.000109 0.0005491 5.362E-05 -0.0001565 0.0014847 -2.454E-05 0.0005302 0.0001024 0 0 0 0 0 0 0
2
Following information has been derived from 53 data points, RISK AND PERFORMANCE MEASURES Intercept (Alpha) = Slope (Beta)= Rf (1- Beta) = Intercept-Rf (1-Beta)= VARIANCE STATISTICS Variance of the stock= Variance of the market = Systematic variance= Unsystematic variance= R squared = USING BETA In estimating expected returns: Riskfree Rate = Historical return premium= Expected return= In forecasting prices: Current price= Annualized DPS= Predicted prices: - One year from now - Two years from now - Three years from now - Four years from now - Five years from now
0.93% 0.89996 0.07% 0.87%
0.005919 0.000258 0.000209 0.00571 3.53%
8.50% 5.50% 13.45%
$170.25 $0.00 $193.15 $219.13 $248.60 $282.03 $319.97
Current share price is approximately Rs. 169 and by our estimation it is coming around to be 170.25.
3
VALUATION OF COMPANY DISCOUNT MODEL
Inputs for FCFE Calculation Current Net Income = Current Dividends = Current Capital Expenditures = Current Depreciation Current Revenue = Current Working Capital = Net Debt Cash flow =
USING
FCFE
AND
DIVIDEND
Rs. Rs.
9,102.00 3,133.00
(in crores) (in crores) (in crores) (in crores)
Rs. 11,114.00 Rs. 2,485.00
Rs. 59,102.00 Rs. Rs. 1,800.00 9,845.00 (in crores)
Enter length of extraordinary growth period = Enter growth rate for high growth period =
5 10.00%
(in years)
Inputs for cost of equity Beta of the stock = Risk free rate= Risk Premium= 0.802 8.50% 5.50% (in percent) (in percent)
Enter growth rate in stable growth period? Return on equity in stable growth =
4.00% 12.00%
(in percent)
Cost of Equity = Net Income = Expected growth rate in net income =
12.91% Rs. 9,102.00 10.00%
Growth Rate in capital spending, depreciation and working capital High Growth 10.00% 10.00% Stable Growth 4.00% 4.00%
Growth rate in capital spending = Growth rate in depreciation =
4
Growth rate in revenues =
10.00%
4.00% 3.05% 5.00% (in percent)
Working Capital as percent of revenues = Cash builds up gets invested at
1 Net Income - (CapExDepreciation) - Change in Working Capital + Net Debt Cash flow Free Cash flow to Equity Dividends PV of FCFE PV of Dividends Cash Build up (invested at specified rate) Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 10,012.20 9,491.90 180.00 10,829.50 11,169.80 3,446.30 9,892.57 3,052.23 7,723.50
2 Rs. 11,013.42 Rs. 10,441.09 Rs. 198.00 Rs. 11,912.45 Rs. 12,286.78 Rs. 3,790.93 Rs. 9,637.53 Rs. 2,973.54 Rs. 16,605.53
3 Rs. 12,114.76 Rs. 11,485.20 Rs. 217.80 Rs. 13,103.70 Rs. 13,515.46 Rs. 4,170.02 Rs. 9,389.06 Rs. 2,896.87 Rs. 26,781.24
4 Rs. 13,326.24 Rs. 12,633.72 Rs. 239.58 Rs. 14,414.06 Rs. 14,867.00 Rs. 4,587.03 Rs. 9,146.99 Rs. 2,822.19 Rs. 38,400.28
5 Rs. 14,658.86 Rs. 13,897.09 Rs. 263.54 Rs. 15,855.47 Rs. 16,353.70 Rs. 5,045.73 Rs. 8,911.17 Rs. 2,749.43 Rs. 51,628.27
Terminal Year Rs. 15,245.22 Rs. 21,455.47 Rs. 115.96 Rs. 16,489.69 Rs. 10,163.48
Rs. 51,628.27
FCFE Growth Rate in Stable Phase = FCFE (Dividends) in Stable Phase = Cost of Equity in Stable Phase = Price at the end of growth phase = Additional cash build up over high growth period = 4.00% Rs. 10,163.48 12.91% Rs. 1,14,055.41
DDM 4.00% Rs. 10,163.48 12.91% Rs. 1,14,055.41 Rs. 51,628.27 FCFE DDM Rs. 14,494.26 Rs. 62,149.07 Rs. 28,132.37 Rs. 1,04,775.69
Present Value of FCFE in high growth phase = Present Value of Terminal Price = Present Value of Cash build up in terminal year = Value of the stock = Number of shares price per share
Rs. 46,977.32 Rs. 62,149.07
Rs. 1,09,126.39 824.54644 Rs. 132.35
Rs. 4,350.70
5
EQUITY MULTIPLES FROM DDM
Current Inputs Current Earnings Book value of equity Revenues = High Growth Period Length of high-growth period
= Growth rate during period (g) = Payout ratio during period (_) = Cost of Equity during period = Stable Growth Period Growth rate in steady state = Payout ratio in steady state = Cost of Equity in steady state = Output Value of Equity = Price/Earnings Ratio = Price/Book Value Ratio = Price/Sales Ratio = 20 10.00% 53.162% 12.91% (Number of periods) (in percent) (in percent) (in percent) Expected ROE = 21.35% Rs. 10,42,00,000.00 $82,34,00,000.00 $5,91,02,00,00,000.00 (in Rs per share) ROE = 12.65%
4.00% 60.00% 12.91%
(in percent) (in percent) (in percent) Expected ROE = 10%
$1,28,46,97,052.08 12.33 1.56 0.00
Current P/E ratio is 18.52 and P/BV value is 2.34. By our valuation, P/E comes out to 12.33 and P/BV comes out to 1.56.
6
CALCULATION OF ENTERPRISE VALUE OF THE FIRM
Current Inputs Current EBIT = Current Depreciation = Current Tax Rate = Current Revenues = Capital Invested (Book Value) = High Growth Period Length of high-growth period = Reinvestment Rate (as % of EBIT(1-t)) = Growth rate during period (g) = Cost of Equity during period = After-tax Cost of Debt = Debt Ratio (D / (D + E)) = Stable Growth Period Growth rate in steady state = Return on capital in stable growth Reinvestment Rate in Stable growth = Cost of Equity in steady state = After-tax Cost of Debt = Debt Ratio (D / (D + E)) = 11.00% 10.50% 104.76% 12.91% 4.50% 38.30% (in percent) (in percent) (in percent) Cost of capital = 9.6890% (in percent) AT Operating Margin Sales/BV Capital Return on Capital = 10.50% 1.00 10.50% 5 62% 25.00% 12.91% 4.50% 20.00% (in percent) (in percent) (in percent) (in percent) Cost of capital = 11.23% (Number of periods) AT Operating Margin= Sales/Capital = Return on Capital = 16.94% 5.32 90.07% Rs. 1,66,84,00,00,000.00 Rs. 24,85,00,00,000.00 40.00% Rs. 5,91,02,00,00,000.00 Rs. 1,11,14,00,00,000.00 (in $) AT Operating Margin = Sales/BV Capital Return on capital = 16.94% 5.32 90.07%
(in percent) (in $)
Output Enterprise Value = EV/EBIT = EV/EBITDA = EV/EBIT(1-t) = EV/Sales = EV/Capital Invested = $9,97,12,08,34,457.83 5.98 5.20 9.96 1.69 8.97
7
doc_667483608.docx
Valuation of NTPC
Industry: Power Sector Company: NTPC
Date:
From Capitaline, following information and ratios of NTPC are extracted which will be tested with various valuation techniques. P/E P/BV EV/EBITDA Latest share price data Beta 18.52 2.34 11.16 169.1 0.7995
Various techniques have been used to value the company and arrive at the share price and study different ratios (P/E multiple and EV multiple).
CALCULATION OF SHARE PRICE USING REGRESSION ON MARKET RETURN TAKING INTO ACCOUNT STOCK SPLITS AND DIVIDEND PAYOUTS
Risk free rate No. of period Tim e peri od Ind ex 8.50% 53 Risk premium for stocks= Riskfree rate during period = DPS ( Stock ) Sp lit F ac to r 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Index Level 5.50% 8.50% Current stock price Current Annual DPS (R(jt)Rj)^2 $170.25 $0.00
Price (Stock)
Return (Stock)
Return (Mkt)
(R(mt)R(m))^2
(R(jt)-R(j))
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
175.9 172.2 166.3 162.05 158.25 159.55 156.95 158.65 156.65 155.75 156.4 162.8 165.25 169.25 169.95 172.65 173.7 174.4 177.75 179.55 178 176.05 177.6 179.35
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
16,805.33 16,846.83 16,483.45 16,123.46 16,008.34 16,167.13 15,695.43 15,858.49 15,699.97 16,065.42 15,946.10 16,371.51 16,461.71 16,775.87 16,882.67 17,118.74 17,192.82 17,362.10 17,569.53 17,562.61 17,481.93 17,464.85 17,480.83 17,705.01
-2.10% -3.43% -2.56% -2.34% 0.82% -1.63% 1.08% -1.26% -0.57% 0.42% 4.09% 1.50% 2.42% 0.41% 1.59% 0.61% 0.40% 1.92% 1.01% -0.86% -1.10% 0.88% 0.99%
0.25% -2.16% -2.18% -0.71% 0.99% -2.92% 1.04% -1.00% 2.33% -0.74% 2.67% 0.55% 1.91% 0.64% 1.40% 0.43% 0.98% 1.19% -0.04% -0.46% -0.10% 0.09% 1.28%
0.0008695 0.0018245 0.0011565 0.0010177 5.615E-08 0.0006124 5.663E-06 0.0004434 0.0002016 1.831E-05 0.0010542 4.352E-05 0.0002482 1.863E-05 5.528E-05 5.618E-06 1.955E-05 0.0001157 2.805E-06 0.0002919 0.0003766 1.243E-07 1.965E-06
4.967E-06 0.0004757 0.0004875 5.447E-05 9.367E-05 0.0008654 0.000103 0.0001048 0.0005307 5.88E-05 0.0006989 2.776E-05 0.0003551 3.752E-05 0.0001888 1.67E-05 9.226E-05 0.000137 4.027E-07 2.337E-05 1.483E-06 4.546E-07 0.0001583
(R(mt)-R(m)) -6.572E-05 0.0009316 0.0007509 0.0002355 -2.293E-06 0.000728 2.415E-05 0.0002156 -0.000327 3.281E-05 0.0008584 3.476E-05 0.0002969 -2.644E-05 0.0001022 -9.686E-06 -4.247E-05 0.0001259 -1.063E-06 8.26E-05 2.363E-05 2.377E-07 1.764E-05
1
25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0
178.6 174.25 173.6 171.15 169.25 171.4 171.9 168.45 168.45 173 173.7 177.1 176.45 170.5 166.6 163.9 163.95 164.7 167.25 168.4 168.15 165.5 163.75 166.45 165.7 172.85 171.9 169 172 164.2 163.7 163.3 162.1 163.4 166.1 167.4
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
17,804.80 17,288.83 17,254.86 16,939.28 16,785.64 16,936.89 17,085.34 16,748.29 17,025.09 17,082.69 16,883.92 16,958.39 16,536.47 16,557.23 16,232.54 15,792.41 15,864.86 16,151.45 16,453.76 16,698.07 16,446.02 16,524.03 16,051.10 16,162.06 16,361.15 17,065.15 17,099.28 16,745.35 16,933.83 16,876.54 16,709.60 16,467.44 16,501.74 16,866.97 17,165.54 17,065.00
-0.42% -2.44% -0.37% -1.41% -1.11% 1.27% 0.29% -2.01% 0.00% 54.05% 0.40% 1.96% -0.37% -3.37% -2.29% -1.62% 0.03% 0.46% 1.55% 0.69% -0.15% -1.58% -1.06% 1.65% -0.45% 4.32% -0.55% -1.69% 1.78% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
0.56% -2.90% -0.20% -1.83% -0.91% 0.90% 0.88% -1.97% 1.65% 0.34% -1.16% 0.44% -2.49% 0.13% -1.96% -2.71% 0.46% 1.81% 1.87% 1.48% -1.51% 0.47% -2.86% 0.69% 1.23% 4.30% 0.20% -2.07% 1.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
0.0001596 0.0010764 0.0001484 0.0005092 0.0003823 1.807E-05 3.063E-05 0.0008135 7.143E-05 0.2830928 1.941E-05 0.0001237 0.0001469 0.0017785 0.0009813 0.000608 6.637E-05 1.503E-05 4.943E-05 2.483E-06 9.873E-05 0.0005862 0.000362 6.459E-05 0.0001679 0.001204 0.0001945 0.0006412 8.648E-05 0 0 0 0 0 0 0
2.911E-05 0.0008538 4.865E-06 0.0003434 8.669E-05 7.691E-05 7.266E-05 0.0003987 0.0002652 9.875E-06 0.0001411 1.739E-05 0.000631 1.03E-06 0.0003941 0.0007483 1.89E-05 0.0003177 0.0003414 0.0002134 0.0002352 2.027E-05 0.000833 4.452E-05 0.0001459 0.0018308 3.095E-06 0.0004385 0.0001213 0 0 0 0 0 0 0
-6.816E-05 0.0009586 2.687E-05 0.0004181 0.0001821 3.728E-05 -4.718E-05 0.0005695 -0.0001376 0.001672 5.232E-05 4.638E-05 0.0003045 -4.279E-05 0.0006218 0.0006745 -3.541E-05 -6.911E-05 0.0001299 -2.302E-05 0.0001524 -0.000109 0.0005491 5.362E-05 -0.0001565 0.0014847 -2.454E-05 0.0005302 0.0001024 0 0 0 0 0 0 0
2
Following information has been derived from 53 data points, RISK AND PERFORMANCE MEASURES Intercept (Alpha) = Slope (Beta)= Rf (1- Beta) = Intercept-Rf (1-Beta)= VARIANCE STATISTICS Variance of the stock= Variance of the market = Systematic variance= Unsystematic variance= R squared = USING BETA In estimating expected returns: Riskfree Rate = Historical return premium= Expected return= In forecasting prices: Current price= Annualized DPS= Predicted prices: - One year from now - Two years from now - Three years from now - Four years from now - Five years from now
0.93% 0.89996 0.07% 0.87%
0.005919 0.000258 0.000209 0.00571 3.53%
8.50% 5.50% 13.45%
$170.25 $0.00 $193.15 $219.13 $248.60 $282.03 $319.97
Current share price is approximately Rs. 169 and by our estimation it is coming around to be 170.25.
3
VALUATION OF COMPANY DISCOUNT MODEL
Inputs for FCFE Calculation Current Net Income = Current Dividends = Current Capital Expenditures = Current Depreciation Current Revenue = Current Working Capital = Net Debt Cash flow =
USING
FCFE
AND
DIVIDEND
Rs. Rs.
9,102.00 3,133.00
(in crores) (in crores) (in crores) (in crores)
Rs. 11,114.00 Rs. 2,485.00
Rs. 59,102.00 Rs. Rs. 1,800.00 9,845.00 (in crores)
Enter length of extraordinary growth period = Enter growth rate for high growth period =
5 10.00%
(in years)
Inputs for cost of equity Beta of the stock = Risk free rate= Risk Premium= 0.802 8.50% 5.50% (in percent) (in percent)
Enter growth rate in stable growth period? Return on equity in stable growth =
4.00% 12.00%
(in percent)
Cost of Equity = Net Income = Expected growth rate in net income =
12.91% Rs. 9,102.00 10.00%
Growth Rate in capital spending, depreciation and working capital High Growth 10.00% 10.00% Stable Growth 4.00% 4.00%
Growth rate in capital spending = Growth rate in depreciation =
4
Growth rate in revenues =
10.00%
4.00% 3.05% 5.00% (in percent)
Working Capital as percent of revenues = Cash builds up gets invested at
1 Net Income - (CapExDepreciation) - Change in Working Capital + Net Debt Cash flow Free Cash flow to Equity Dividends PV of FCFE PV of Dividends Cash Build up (invested at specified rate) Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 10,012.20 9,491.90 180.00 10,829.50 11,169.80 3,446.30 9,892.57 3,052.23 7,723.50
2 Rs. 11,013.42 Rs. 10,441.09 Rs. 198.00 Rs. 11,912.45 Rs. 12,286.78 Rs. 3,790.93 Rs. 9,637.53 Rs. 2,973.54 Rs. 16,605.53
3 Rs. 12,114.76 Rs. 11,485.20 Rs. 217.80 Rs. 13,103.70 Rs. 13,515.46 Rs. 4,170.02 Rs. 9,389.06 Rs. 2,896.87 Rs. 26,781.24
4 Rs. 13,326.24 Rs. 12,633.72 Rs. 239.58 Rs. 14,414.06 Rs. 14,867.00 Rs. 4,587.03 Rs. 9,146.99 Rs. 2,822.19 Rs. 38,400.28
5 Rs. 14,658.86 Rs. 13,897.09 Rs. 263.54 Rs. 15,855.47 Rs. 16,353.70 Rs. 5,045.73 Rs. 8,911.17 Rs. 2,749.43 Rs. 51,628.27
Terminal Year Rs. 15,245.22 Rs. 21,455.47 Rs. 115.96 Rs. 16,489.69 Rs. 10,163.48
Rs. 51,628.27
FCFE Growth Rate in Stable Phase = FCFE (Dividends) in Stable Phase = Cost of Equity in Stable Phase = Price at the end of growth phase = Additional cash build up over high growth period = 4.00% Rs. 10,163.48 12.91% Rs. 1,14,055.41
DDM 4.00% Rs. 10,163.48 12.91% Rs. 1,14,055.41 Rs. 51,628.27 FCFE DDM Rs. 14,494.26 Rs. 62,149.07 Rs. 28,132.37 Rs. 1,04,775.69
Present Value of FCFE in high growth phase = Present Value of Terminal Price = Present Value of Cash build up in terminal year = Value of the stock = Number of shares price per share
Rs. 46,977.32 Rs. 62,149.07
Rs. 1,09,126.39 824.54644 Rs. 132.35
Rs. 4,350.70
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EQUITY MULTIPLES FROM DDM
Current Inputs Current Earnings Book value of equity Revenues = High Growth Period Length of high-growth period
= Growth rate during period (g) = Payout ratio during period (_) = Cost of Equity during period = Stable Growth Period Growth rate in steady state = Payout ratio in steady state = Cost of Equity in steady state = Output Value of Equity = Price/Earnings Ratio = Price/Book Value Ratio = Price/Sales Ratio = 20 10.00% 53.162% 12.91% (Number of periods) (in percent) (in percent) (in percent) Expected ROE = 21.35% Rs. 10,42,00,000.00 $82,34,00,000.00 $5,91,02,00,00,000.00 (in Rs per share) ROE = 12.65%4.00% 60.00% 12.91%
(in percent) (in percent) (in percent) Expected ROE = 10%
$1,28,46,97,052.08 12.33 1.56 0.00
Current P/E ratio is 18.52 and P/BV value is 2.34. By our valuation, P/E comes out to 12.33 and P/BV comes out to 1.56.
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CALCULATION OF ENTERPRISE VALUE OF THE FIRM
Current Inputs Current EBIT = Current Depreciation = Current Tax Rate = Current Revenues = Capital Invested (Book Value) = High Growth Period Length of high-growth period
= Reinvestment Rate (as % of EBIT(1-t)) = Growth rate during period (g) = Cost of Equity during period = After-tax Cost of Debt = Debt Ratio (D / (D + E)) = Stable Growth Period Growth rate in steady state = Return on capital in stable growth Reinvestment Rate in Stable growth = Cost of Equity in steady state = After-tax Cost of Debt = Debt Ratio (D / (D + E)) = 11.00% 10.50% 104.76% 12.91% 4.50% 38.30% (in percent) (in percent) (in percent) Cost of capital = 9.6890% (in percent) AT Operating Margin Sales/BV Capital Return on Capital = 10.50% 1.00 10.50% 5 62% 25.00% 12.91% 4.50% 20.00% (in percent) (in percent) (in percent) (in percent) Cost of capital = 11.23% (Number of periods) AT Operating Margin= Sales/Capital = Return on Capital = 16.94% 5.32 90.07% Rs. 1,66,84,00,00,000.00 Rs. 24,85,00,00,000.00 40.00% Rs. 5,91,02,00,00,000.00 Rs. 1,11,14,00,00,000.00 (in $) AT Operating Margin = Sales/BV Capital Return on capital = 16.94% 5.32 90.07%(in percent) (in $)
Output Enterprise Value = EV/EBIT = EV/EBITDA = EV/EBIT(1-t) = EV/Sales = EV/Capital Invested = $9,97,12,08,34,457.83 5.98 5.20 9.96 1.69 8.97
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