Date

Adjusted Closing Security Returns(Rs)

CNX500 Closing Market Return(Rm)

27-Mar-15
20-Mar-15
13-Mar-15
5-Mar-15
28-Feb-15

619.50
699.75
747.33
668.30
632.10

-11.4683815648
-6.3666653286
11.8255274577
5.7269419396
-4.3403250704

6846.60
7028.20
7099.90
7303.35
7239.45

-2.5838763837
-1.0098733785
-2.7857079286
0.8826637383
0.4168169334

20-Feb-15

660.78

2.8403343035

7209.40

0.4626403946

13-Feb-15

642.53

8.0736043597

7176.20

2.0876455484

6-Feb-15

594.53

-1.2572662348

7029.45

-1.9151073716

30-Jan-15

602.10

10.1939970717

7166.70

-0.0495101287

23-Jan-15

546.40

4.2588917722

7170.25

2.9993751302

16-Jan-15

524.08

4.4712448919

6961.45

2.6308418104

9-Jan-15

501.65

5.1677148847

6783.00

-1.2153296099

2-Jan-15

477.00

11.6965226554

6866.45

1.3700146893

31-Dec-14

427.05

8.86356684

6773.65

1.4809432492

26-Dec-14

392.28

-1.9741116498

6674.80

0.0697135747

19-Dec-14
12-Dec-14
5-Dec-14
28-Nov-14
21-Nov-14

400.18
393.00
402.45
397.05
409.78

1.8269720102
-2.3481177786
1.3600302229
-3.1065449754
0.7498832149

6670.15
6680.55
6937.55
6918.05
6847.30

-0.1556758051
-3.7044778056
0.2818713366
1.0332539833
0.9070478576

14-Nov-14

406.73

3.9167092489

6785.75

0.9641494134

7-Nov-14
31-Oct-14
23-Oct-14
17-Oct-14
10-Oct-14

391.40
361.08
347.18
348.65
371.95

8.3970311288
4.0036868483
-0.4216262728
-6.2642828337
-2.2727272727

6720.95
6685.75
6463.25
6255.15
6330.35

0.526492914
3.4425405175
3.3268586685
-1.1879279977
-1.0581349005

1-Oct-14
26-Sep-14
19-Sep-14
12-Sep-14
5-Sep-14
28-Aug-14
22-Aug-14
14-Aug-14
8-Aug-14

380.60
384.25
377.43
393.78
369.98
370.83
372.80
343.93
349.88

-0.9499024073
1.8069575815
-4.1520646046
6.4327801503
-0.2292155435
-0.5284334764
8.3941499724
-1.700583057
11.968766001

6398.05
6396.55
6561.65
6572.70
6502.30
6360.75
6352.35
6215.65
6072.65

0.0234501411
-2.5161354233
-0.1681196464
1.082693816
2.2253665055
0.1322345274
2.1992872829
2.3548203832
-0.6389384296

1-Aug-14
25-Jul-14
18-Jul-14
11-Jul-14
4-Jul-14
27-Jun-14
20-Jun-14
13-Jun-14
6-Jun-14

312.48
306.48
298.38
255.75
270.23
267.18
272.63
226.18
207.23

1.9577133908
2.7146591595
16.6686217009
-5.3583984014
1.1415525114
-1.9990463265
20.536740649
9.1444288954
3.3050847458

6111.70
6230.45
6184.55
5991.70
6297.60
6082.10
6038.60
6057.50
6129.95

-1.9059618487
0.7421720255
3.2186190897
-4.8574059959
3.5431840976
0.7203656477
-0.3120099051
-1.1819019731
5.6368853236

30-May-14
23-May-14

200.60
201.53

-0.4614697564
4.3223936225

5802.85
5923.65

-2.0392832122
4.7321428571

16-May-14

193.18

-2.7535867103

5656.00

5.21029037

9-May-14

198.65

-3.7455179765

5375.90

2.1849665935

2-May-14

206.38

13.3022234422

5260.95

-1.2695642383

25-Apr-14

182.15

12.6259815742

5328.60

0.3361107188

17-Apr-14

161.73

6.1708133657

5310.75

-0.1306956015

11-Apr-14
4-Apr-14

152.33
132.65

14.8360346777
0.3555757301

5317.70
5234.50

1.5894545802
0.6218582701

28-Mar-14
22-Mar-14
14-Mar-14
7-Mar-14
28-Feb-14
21-Feb-14
14-Feb-14
7-Feb-14
31-Jan-14
24-Jan-14
17-Jan-14
10-Jan-14
3-Jan-14
31-Dec-13
27-Dec-13
20-Dec-13
13-Dec-13
6-Dec-13
29-Nov-13
22-Nov-13
14-Nov-13
8-Nov-13
1-Nov-13
25-Oct-13
18-Oct-13
11-Oct-13
4-Oct-13
27-Sep-13
20-Sep-13
13-Sep-13
6-Sep-13
30-Aug-13
23-Aug-13
16-Aug-13
8-Aug-13
2-Aug-13
26-Jul-13
19-Jul-13
12-Jul-13
5-Jul-13
28-Jun-13
21-Jun-13
14-Jun-13
7-Jun-13
31-May-13
24-May-13

132.18
132.10
130.00
127.30
128.93
108.90
111.00
112.28
111.60
107.93
102.90
111.65
106.70
112.28
110.05
100.63
96.93
98.70
97.40
96.23
105.40
103.38
96.60
93.90
93.30
93.58
92.08
88.75
97.45
97.33
93.30
94.20
98.73
98.15
95.63
99.70
106.88
114.28
113.08
97.63
98.28
100.68
105.68
109.90
106.65
107.10

0.0605601817
1.6153846154
2.120974077
-1.2642519196
18.3930211203
-1.8918918919
-1.140007125
0.6093189964
3.4003520801
4.8882410107
-7.8369905956
4.6391752577
-4.9697185607
2.0263516583
9.3610255391
3.8171876612
-1.7933130699
1.3347022587
1.2158370571
-8.7001897533
1.9539562778
7.0186335404
2.875399361
0.6430868167
-0.2992092327
1.629018245
3.7521126761
-8.9276552078
0.1232918936
4.3193997856
-0.9554140127
-4.5882710422
0.5909322466
2.6351563317
-4.0822467402
-6.7178143713
-6.4753237662
1.0611956137
15.8250537745
-0.6613756614
-2.3837902265
-4.7312641938
-3.8398544131
3.0473511486
-0.4201680672
2.1946564885

5202.15
5037.50
5011.55
5033.85
4849.50
4762.75
4677.80
4701.70
4709.15
4836.70
4841.30
4813.95
4850.65
4914.85
4914.70
4861.65
4756.05
4830.80
4770.10
4632.45
4670.10
4725.90
4823.00
4693.40
4706.90
4651.80
4516.15
4455.95
4560.10
4450.45
4319.40
4175.85
4183.65
4224.30
4250.35
4314.95
4507.25
4632.75
4630.95
4535.80
4510.90
4420.15
4525.95
4621.10
4681.45
4685.60

3.2684863524
0.5178038731
-0.443000884
3.8014228271
1.8214266968
1.816024627
-0.5083267754
-0.158202648
-2.6371286208
-0.0950158015
0.5681405083
-0.756599631
-1.3062453585
0.0030520683
1.0911933191
2.2203298956
-1.5473627557
1.2725100103
2.971429805
-0.8061925869
-1.1807274805
-2.0132697491
2.761324413
-0.2868129767
1.1844877252
3.0036646258
1.351002592
-2.2839411416
2.4637957959
3.0339862018
3.4376234779
-0.1864400703
-0.9622896101
-0.6128907031
-1.4971204765
-4.2664595929
-2.7089741514
0.0388689146
2.097755633
0.5519962757
2.0530977456
-2.3376307736
-2.0590335634
-1.2891305044
-0.0885692334
-3.3318891708

17-May-13
11-May-13
3-May-13
26-Apr-13
18-Apr-13
12-Apr-13
5-Apr-13
28-Mar-13
22-Mar-13
15-Mar-13
8-Mar-13
1-Mar-13
22-Feb-13
15-Feb-13
8-Feb-13
1-Feb-13
25-Jan-13
18-Jan-13
11-Jan-13
4-Jan-13
31-Dec-12
28-Dec-12
21-Dec-12
14-Dec-12
7-Dec-12
30-Nov-12
23-Nov-12
16-Nov-12
9-Nov-12
2-Nov-12
26-Oct-12
19-Oct-12
12-Oct-12
5-Oct-12
28-Sep-12
21-Sep-12
14-Sep-12
8-Sep-12
31-Aug-12
24-Aug-12
17-Aug-12
10-Aug-12
3-Aug-12
27-Jul-12
20-Jul-12
13-Jul-12
6-Jul-12
29-Jun-12
22-Jun-12
15-Jun-12
8-Jun-12
1-Jun-12
25-May-12
18-May-12
11-May-12
4-May-12
28-Apr-12

104.80
91.58
89.03
84.78
80.95
79.23
78.43
71.98
93.48
96.55
96.50
95.83
102.48
99.68
109.38
112.40
112.00
116.70
114.80
110.35
104.23
105.05
101.05
103.40
104.50
108.25
109.63
107.60
111.08
98.08
86.33
83.93
76.93
76.05
78.25
76.08
79.03
76.30
67.93
66.75
70.18
66.93
62.98
59.93
59.50
60.98
60.60
59.93
60.40
61.88
52.38
52.15
50.45
52.43
55.40
56.80
58.45

14.435466259
2.8642030776
5.0129747582
4.7313156269
2.1708948631
1.0200178503
8.9608224507
-22.999572101
-3.1796996375
0.0518134715
0.6991547532
-6.4890710383
2.808988764
-8.8681660267
-2.6868327402
0.3571428571
-4.0274207369
1.6550522648
4.0326234708
5.8716300489
-0.7805806759
3.9584364176
-2.2727272727
-1.0526315789
-3.4642032333
-1.2587795312
1.8866171004
-3.1328772056
13.2544861338
13.6105641144
2.8595257953
9.0991810737
1.1571334648
-2.8115015974
2.8522607781
-3.7327597115
3.5779816514
12.3215074341
1.7677902622
-4.8874323169
4.8558195129
6.2718323277
5.089270816
0.7226890756
-2.4270252542
0.6270627063
1.1179709661
-0.7781456954
-2.3917259211
18.1366933944
0.4410354746
3.3696729435
-3.7764638566
-5.3610108303
-2.4647887324
-2.8229255774
0.2916952642

4847.10
4779.75
4659.10
4591.65
4526.80
4352.75
4366.65
4438.35
4404.50
4598.20
4660.65
4499.75
4621.80
4647.25
4682.55
4775.90
4816.45
4844.05
4778.15
4844.00
4743.45
4738.30
4686.90
4698.80
4724.25
4675.25
4474.15
4451.10
4508.80
4510.25
4480.30
4509.45
4506.15
4547.90
4504.35
4456.15
4348.80
4210.90
4129.90
4226.00
4223.70
4186.95
4129.05
4028.25
4134.75
4156.75
4224.15
4170.65
4063.75
4047.45
4010.95
3851.95
3910.60
3889.05
3928.25
4050.85
4147.10

1.409069512
2.5895559228
1.4689708493
1.4325793055
3.9986215611
-0.3183218257
-1.6154652067
0.768532183
-4.2125179418
-1.3399418536
3.5757542086
-2.6407460297
-0.5476356985
-0.7538627457
-1.9546054147
-0.8419063833
-0.5697711626
1.3791948767
-1.3594137077
2.1197651498
0.1086887702
1.0966737076
-0.2532561505
-0.5387098481
1.0480722956
4.4947084921
0.5178495203
-1.2797196593
-0.032148994
0.6684820213
-0.6464202952
0.0732332479
-0.9180061127
0.9668431627
1.0816512011
2.4684970567
3.2748343585
1.9613065692
-2.2740179839
0.0544546251
0.8777272239
1.4022595997
2.5023273133
-2.5757300925
-0.5292596379
-1.5955872779
1.2827736684
2.6305752076
0.4027227019
0.9100088508
4.1277794364
-1.4997698563
0.5541199007
-0.9978998282
-3.0265252972
-2.3208989414
-1.8751404877

20-Apr-12
13-Apr-12
4-Apr-12

58.28
56.05
52.28

3.9785905442
7.2111706197

4226.35
4169.55
4262.20

1.3622573179
-2.17376003

Aarti
Drugs Ltd
Industry
: Pharmaceuticals
Indian - Bulk Drugs
Ans1)

Financial Year
2014-2015
2013-2014
2012-2013
Combined

Given
Tax
Growth Rate

CovarianceMarket VarianBeta
2.3102208 4.5999539069 0.50223
3.4758273 3.8886498237 0.89384
2.0695792 3.482049764 0.59436
2.7642377 4.0266586275 0.68648

0.3

Ans2)

Ans3)

0.04

Ans4)

Ans5)

Ans6)

ANALYSIS
Beta for 1st Year
Beta for 2nd Year
Beta for 3rd Year

0.502227
0.893839
0.594357

1). Since <1 i.e.0.502227 in 2014-15 so we can say it was defensive and less risky investment in that year.
2). Since <1 i.e.0.893839 in 2013-14 so we can say it was less defensive and risky investment in that year.
3). Since <1 i.e. 0.594357 in 2012-13 so we can say it was less defensive and risky investment in that year.

Risk Free Rate

Market Risk Premium
Beta
Cost of Equity

0.084
0.10
0.686484
0.152648400

Year
Intrest
Total Debt

2015
422.1
4,027.50
0.1048044693
0.0733631285

Cost of Debt

Cost of Debt(1-tax)

Year
Equity
Debt
Total
We
Wd
WACC

Years
2010-11
2011-12
2012-13
2013-14

Cost of Debt

2015
242.2
4,027.50
4,269.70
0.0567252969
0.9432747031
0.0778606091

EBIT(1-tax)

WACC

D&A

1210.650

EPS

Current Assets

177.4
242.2
259.8
281.2
306.6

453.880
572.600
859.110
1056.860

2014-15

Years
2010-11
2011-12
2012-13
2013-14
2014-15

Cost of Equity

P/E
17.74
17.74
35.7
48.76
30.43

2480.70
3269.00
4082.10
4572.40
5067.40

Growth in EPS (in %)

7.22
5.74
4.01
5.4
21.42

0
101.2401352875
36.5826330532
-37.5922887613

Years

2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
Present Value

Predicted cash Flows

1799.3154589502
3196.4615893934
5678.4743562582
10087.7392431925
17920.7436107368
28747.2448374324

Current Market Value of the Share =

476.75
Value of the share of the company as per EPS and P/E ratio = ratio = 333.2859854
Value of the share of the future cash flows =
15328.30224

As per our calculation of share price based on cash flows as well as EPS, the sha

sky investment in that year.

sky investment in that year.
sky investment in that year.

0.152648400

0.0733631285

0.077860609

Current Liabilities

Working Capital
Changes in WC Free cash flows Growth Rate
1079.30
1401.40
1314.60
1954.40
553.00
261.80
1760.20
2321.90
367.50
751.41 1.8701680672
2140.80
2431.60
109.70
1228.36 0.6347400221
2131.40

2936.00

Average growth in EPS

Average P/E
Expected EPS in next year
Value of share

25.0576198949
8.758
38.055033734
333.2859854424

504.40

1012.85 -0.1754453092
Average Growth 0.7764875934

Industry Growth
D1
Perpetuity

0.04
18637.573355166
492268.1862948

Present Value of Perpetuity

338367.59616423

Value of the firm

Value of equity

41148.20280769
371207028076.90

No of shares outstanding
Value per share

15328.302235895

24217100

s as well as EPS, the share is undervalued at market price of Rs 476.75 as on 14-02-2016

as on 14-02-2016

Data Collected
EBIT
2015
2014
2013
2012
2011

ebit
d an a
1729.50
1509.80
1227.30
818.00
648.40

ca

cl

5,067.40
4,572.40
4,082.10
3,269.00
2,480.70

2,480.70
177.4

242.2

259.8

281.2

306.6

3,269.00

4,082.10

4,572.40

5,067.40