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  • Calculation of Free Cashflow To The Firm: DCF Valuation (Amounts in Millions)

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    Prachi Navghare
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    This document provides financial information and calculations to estimate the discounted cash flow valuation of a company from 2017-2022. It summarizes key financial figures like EBIT, capital expenditures, depreciation, and free cash flow to the firm. It then calculates the weighted average cost of capital, estimates the terminal value in 2022, discounts future free cash flows to calculate enterprise value of $2.14B, and estimates the intrinsic value per share is $7,079, indicating the current market price is undervalued.

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    VALUATION OF MARUTI SUZUKI

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    Valuation

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    This document provides financial information and calculations to estimate the discounted cash flow valuation of a company from 2017-2022. It summarizes key financial figures like EBIT, capital expenditures, depreciation, and free cash flow to the firm. It then calculates the weighted average cost of capital, estimates the terminal value in 2022, discounts future free cash flows to calculate enterprise value of $2.14B, and estimates the intrinsic value per share is $7,079, indicating the current market price is undervalued.

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    © All Rights Reserved
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    25 views1 page

    Calculation of Free Cashflow To The Firm: DCF Valuation (Amounts in Millions)

    Uploaded by

    Prachi Navghare
    This document provides financial information and calculations to estimate the discounted cash flow valuation of a company from 2017-2022. It summarizes key financial figures like EBIT, capital expenditures, depreciation, and free cash flow to the firm. It then calculates the weighted average cost of capital, estimates the terminal value in 2022, discounts future free cash flows to calculate enterprise value of $2.14B, and estimates the intrinsic value per share is $7,079, indicating the current market price is undervalued.

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    DCF Valuation (Amounts In Millions)

    Calculation of Free Cashflow to the Firm


    2017 2018 2019 2020 2021 2022
    CA (excluding cash) 87,745 155,109 173,369 193,779 216,591 242,089
    CL (excluding short term debt) 127,532 149,229 166,796 186,432 208,380 232,911
    Working Capital (39,787) 5,881 6,573 7,347 8,212 9,178

    EBIT 101,272 80,701 85,937 91,789 98,330 105,641


    Changes in WC (33,906) 692 774 865 967
    Deprecition and Amortization 26,039 34,829 38,929 43,512 48,635 54,360
    Capex 32,524 47,280 52,846 59,067 66,020 73,793
    Tax Rate
    26%
    FCFF ( EBIT-Tax-Changes in wc-
    capex+depreciation) 13,496.17 49,127.60 51,748.02 54,676.93 57,950.64
    PV OF FCFF INR 12,342.52 INR 49,127.60 INR 51,748.02 INR 54,676.93 INR 57,950.64
    1 2 3 4 5
    2014 2015 2016 2017
    PBT 37,338 49,760 75,847 101,272
    Tax Exp 9,022 11,854 20,875 26,162
    Tax rate 24% 24% 28% 26%
    CAPEX 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
    Purchase of Fixed asset 32,725 35,449 32,792 24,686 32,524 47,280 52,846 59,067 66,020 73,793
    Revenue 432,159 432,718 492,950 570,615 669,247 748,033 836,093 934,521 1,044,535 1,167,501
    % of Sale 8% 8% 7% 4% 5%
    Average 6%

    Long term growth rate 7%


    CMP 6552.08 Beta Calculation
    Diluted Shares 302.08 Regression Beta 1.0
    Market Cap 1,979,252 Average D/E 0.00
    Long term Liabilities+ short term 4,836 Unlevered Beta 1.0
    Cash and Cash equivalents 227 Levered Beta 1.0
    Net Debt 4,609
    Enterprise Value 1,983,861

    Weightage COD
    Debt to Capital 0.2% Interest Rate 18.5%
    Equtiy to Captial 99.8% After tax COD 13.7%
    Debt to Equity 0.0023
    Debt to Equity 0.0000 WACC 9.3%

    COE Calculation Calculated Enterprise Value Amt in Rs


    Beta of Stock 1.0 Sum of PV of FCFF INR 452,845
    RFR 7% Terminal Value 2,642,036
    Implied market return in india 9.3% PV of Terminal Value INR 1,690,073
    Market Risk Premium of India 1.8% Enterprise Value INR 2,142,918
    Cost of Equity 9.3% Less- Debt 4,609
    Add-Cash 227
    Intrinsic Value Equity Value 2,138,536
    Equity Value 2,138,536 Terminal Value as % of TV 79%
    Diluted Shares 302.08
    Intrinsic Value 7,079
    Valuation UNDERVALUED CMP is lower the intrinsic value
    Discount / ( Premium ) 527

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