Discounted Cash Flow Calculation for DSE:IDLC using Excess Returns Model Model
The calculations below outline how an intrinsic value for IDLC Finance is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
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
IDLC Finance'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 IDLC Finance 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 Consumer Finance industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare IDLC Finance's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare IDLC Finance's earnings growth to the Bangladesh market average as no estimate data is available.
Unable to compare IDLC Finance's revenue growth to the Bangladesh market average as no estimate data is available.
Unable to determine if IDLC Finance is high growth as no earnings estimate data is available.
Unable to determine if IDLC Finance 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.
IDLC Finance'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.
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. Arif Khan has been the Chief Executive Officer and Managing Director of IDLC Finance Limited since March 1, 2016. Mr. Khan served as the Deputy Managing Director at IDLC Finance Limited and has been its Director March 3, 2016. He started his career with AB Bank Limited as Probationary Officer in 1991. Prior joining IDLC, he was the Commissioner of Bangladesh Securities and Exchange Commission till January 31, 2016. He has around 24 years of experience, out of which around 15 years with IDLC and has experience for brief periods with Institutions like BAT, Beximco Fisheries & Zenith Investments Limited. While leaving IDLC in December 2010, Mr. Khan was the Deputy Managing Director of the Company. He has completed his Masters in Finance & Banking from University of Dhaka. He also completed his MBA, major in finance, from IBA. He is a CFA and also a Fellow member of the Institute of Cost and Management Accountants of Bangladesh (FCMA).
Insufficient data for Arif to compare compensation growth.
Insufficient data for Arif to establish whether their remuneration is reasonable compared to companies of similar size in Bangladesh.
Management Team Tenure
Average tenure of the
management team in years:
The tenure for the IDLC Finance management team is about average.
CEO, MD & Director
Md. Masud Majumder
Deputy GM & Group CFO
M. Ataur Chowdhury
Deputy GM & Head of Operations
GM & CTO
Head of Administration
Assistant GM and Group Head of Internal Control & Compliance
Head of Legal
Deputy GM & Group Chief Marketing Officer
GM & Group Head of Human Resources
Asif Bin Shams
Chief Risk Officer
Board of Directors Tenure
Average tenure of the
board of directors in years:
The tenure for the IDLC Finance board of directors is about average.
Board of Directors
Aziz Al Mahmood
CEO, MD & Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
IDLC Finance Limited operates as a financial institution in Bangladesh. The company operates through four segments: Small Medium Enterprise (SME) Financing; Corporate Financing; Consumer Financing Including Home Loans, Car Loans & Personal Loans; and Wealth Management. It offers consumer financing products, such as home, car, and personal loans, as well as deposit products; and small business loans that include SME term loans, loans for women entrepreneurs, revolving short term loans, abashan loans, partially secured loans, seasonal loans, commercial space loans, commercial vehicle loans, and start up loans, as well as supplier finance products, including factoring, distributor finance, and work orders. The company also provides medium business loans that include term loan financing, lease finance, and machinery lease finance. In addition, the company offers corporate finance products, such as working capital loans, bridge loans, preferred stocks, and commercial space loans; and structured finance products that include debt and working capital syndication, agency and trusteeship, zero coupon and coupon bearing bonds, commercial papers, private equity and preference shares, and corporate advisory services. Further, it offers portfolio management, issue management, mutual fund, venture capital, alternative investment funds management, and underwriting services. The company was formerly known an Industrial Development Leasing Company of Bangladesh Limited and changed its name to IDLC Finance Limited in August 2007. IDLC Finance Limited was founded in 1985 and is headquartered in Dhaka, Bangladesh.
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