Discounted Cash Flow Calculation for BSE:505807 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
BSE:505807 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Rolcon Engineering's share price is below the future cash flow value, and at a moderate discount (> 20%).
Rolcon Engineering's share price is below the future cash flow value, but not at a substantial discount (< 40%).
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
Rolcon Engineering'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 Rolcon Engineering 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 Machinery industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Rolcon Engineering's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Rolcon Engineering's earnings growth to the India market average as no estimate data is available.
Unable to compare Rolcon Engineering's revenue growth to the India market average as no estimate data is available.
Unable to determine if Rolcon Engineering is high growth as no earnings estimate data is available.
Unable to determine if Rolcon Engineering 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.
In the same way as past performance we look at the future estimated return
(profit) compared to the available
funds. We do this looking forward 3 years.
Unable to establish if Rolcon Engineering will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
Examine whether Rolcon Engineering is trading at Rolcon Engineering'san attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
Rolcon Engineering'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
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Rolcon Engineering's finances.
The net worth of a company is the difference between its assets and liabilities.
Rolcon Engineering is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Rolcon Engineering's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Rolcon Engineering's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 121.4x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
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. Ashish Suresh Amin has been the Managing Director at Rolcon Engineering Company Limited since August 2, 2007. Mr. Amin has also a practical work experience of one year at F.C.A. Manufacturing as a Technical Consultant in U.S.A. During the span of last 10 years, he has expertise in the areas of Production, Planning, Marketing and General Administration. He has been a Director of Rolcon Engineering Company Limited since August 2, 1997. Mr. Amin holds a degree of B.S. (Manufacturing, Operation, Production, Planning Engineering) from Bradly University of U.S.A.
Ashish's compensation has been consistent with company performance over the past year, both up more than 20%.
Ashish's remuneration is lower than average for companies of similar size in India.
MD & Director
Chief Financial Officer
Compliance Officer & Company Secretary
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Rolcon Engineering board of directors is about average.
Board of Directors
MD & Director
Woman Non-Executive Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Rolcon Engineering Company Limited manufactures and sells industrial chains and sprocket wheels primarily in India. The company offers precision industrial transmission chains; and conveyor, elevator, and special purpose chains, and related sprockets. Its products are used in steel, fertilizer, cement, sugar, chemical, and mining, paper plants, ONGC, and other industries. The company markets its products under the ROL-KOBO registered brand through distributors and sales outlets. Rolcon Engineering Company Limited also exports its products. The company was incorporated in 1961 and is based in Vallabh Vidyanagar, India.
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