Company Valuation

By
Koundinya Nimmagadda
Divi Sravya
Konda Pavan
Ankit Lalwani
Chiathanyamadhav

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

About the Company

Fastest growing Company in the Segment
Extensive product portfolio that includes high end
showers, steam cubicles, and whirlpools, besides
sanitary ware and faucets
Advanced Technology-the Forte
PAT increase 23.26% in 2015-16
Gold Award in the bathroom & fittings and sanitary ware
category by the Readers Digest Trusted Brand Survey.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Financial Statement

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Key Figures
Assets-506.15 Crores*
Paid-up Equity Capital-6.5 Crores*
Total Shareholder Funds-421.02 Crores*
Total Liabilities-85.12 Crores*
ROE= 19.82%
Planning to go totally Unlevered by FY18**

*Data from Capital Line

**from press release

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Other Important Aspects

Inventory Policy-FIFO, no changes in the period
Leasehold Land =12.26 lacs, classified as operating lease.
Research and Development expenses, Advertisement
expenses etc.., have been recognised in other expenses,
hence no tax benefit in future due to tax benefits
Future Expansions in line
Contingent Liabilities worth 20.44Crores
INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Valuation by DCF

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Key Figures(Contd)
Data

Value

CRISIL Growth rate

Projected

26.00%

Dividend payout Ratio

17.00%

Long Term Growth Rate

12.34%

No of Equity Shares

13005874

Share Price

2387.95

Market Value Equity

3105.73 CR

Beta
Rf

1.13
7.26%

Risk Premium

9.28%

COE

17.75%

COD

15.56%

Debt

35.08

WACC

17.75%

Source
http://www.cera-india.com/CorporateFile/IER%20-%20Dec
%202015%20Cera%20Sanitaryware%20Ltd.pdf
http://www.moneycontrol.com/financials/cerasanitary/cons
olidated-ratios/cs18
Sustainable Growth Rate
Source:
http://www.moneycontrol.com/financials/cerasanitaryware/
capital-structure/CS18
Closing Price on 21st July, 2016
Reuters
30 yr T-Bill rate
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/d
atafile/ctryprem.html
Using CAPM
From Bank, calculated from Bal Sheet and Income
Statement, since the company is expected to be
unlevered by FY18 as per CRISIL report it doesnt have
much of an effect
crores
Only COE is taken into consideration since company is
expected to be unlevered by FY18

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Forecasted Income Statement

Year

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Revenues

1231.11

1551.20

1954.51

2462.68

3102.98

3506.36

COGS

797.72

1005.13

1266.46

1595.74

2010.63

2272.01

Gross Profit

433.39

546.07

688.05

866.94

1092.35

1234.35

EBITDA

233.07

293.67

370.03

466.24

587.46

663.83

Indirect Exp

0.00

0.00

0.00

0.00

0.00

0.00

Miscellaneous

42.51

53.57

67.49

85.04

107.15

121.08

Op.Profit

190.56

240.11

302.54

381.20

480.31

542.75

Depreciation

20.56

25.91

32.65

41.13

51.83

58.57

EBIT

170.00

214.20

269.89

340.06

428.48

484.18

Interest

6.88

8.67

10.92

13.76

17.34

19.59

EBT

163.12

205.53

258.97

326.30

411.14

464.59

tax

57.96

73.03

92.02

115.94

146.09

165.08

PAT

105.16

132.50

166.95

210.36

265.05

299.51

tax rate

35%

35%

35%

35%

35%

35%

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

Conclusion
FCFF

63.95

84.40

110.39

143.36

185.16

195.14

Discount Factor

0.85

0.72

0.61

0.52

0.44

CF

54.31

60.87

67.61

74.57

81.80

TV

3606.94

Value (in Cr)

3946.10

Contingent Liabilities

20.44

Value adjusted to Contingent

Liabilities (in Cr)

3925.65

Per Share (Rs)

3018.37

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

THANK YOU

INDIAN INSTITUTE OF MANAGEMENT RAIPUR