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    Farzana Fariha Lima
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    This document analyzes and values Northern Jute Manufacturing Company Ltd. It begins with an overview of factors influencing the jute manufacturing industry such as global economics, government policies, and Porter's Five Forces model. It then evaluates the company's operating performance using metrics like EBIT, EBIT(1-tax rate), depreciation, capital expenditures, and free cash flow over several years. Two valuation models are used: a free cash flow model that results in an enterprise value of Rs. 13,088 crores and an equity value of Rs. 12,928 crores. A dividend discount model is also used that values the company at Rs. 2.936 crores based on projected dividend payments over many years.

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    This document analyzes and values Northern Jute Manufacturing Company Ltd. It begins with an overview of factors influencing the jute manufacturing industry such as global economics, government policies, and Porter's Five Forces model. It then evaluates the company's operating performance using metrics like EBIT, EBIT(1-tax rate), depreciation, capital expenditures, and free cash flow over several years. Two valuation models are used: a free cash flow model that results in an enterprise value of Rs. 13,088 crores and an equity value of Rs. 12,928 crores. A dividend discount model is also used that values the company at Rs. 2.936 crores based on projected dividend payments over many years.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    22 views8 pages

    23 004 F 307 Powerpoint PDF

    Uploaded by

    Farzana Fariha Lima
    This document analyzes and values Northern Jute Manufacturing Company Ltd. It begins with an overview of factors influencing the jute manufacturing industry such as global economics, government policies, and Porter's Five Forces model. It then evaluates the company's operating performance using metrics like EBIT, EBIT(1-tax rate), depreciation, capital expenditures, and free cash flow over several years. Two valuation models are used: a free cash flow model that results in an enterprise value of Rs. 13,088 crores and an equity value of Rs. 12,928 crores. A dividend discount model is also used that values the company at Rs. 2.936 crores based on projected dividend payments over many years.

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    of 8

    Company Analysis and Valuation

    (Northern Jute Manufacturing Company Ltd.)


    Global Economic Influences
    Tax Credit
    Government Expenditure
    Industry Influences on Jute manufacturing Industry
    Porter`s Five Forces Model

    Supplier Buyer Entry


    Substitutes Competitor
    power Power barriers
    Company Analysis

    Evaluating Operating Performanc


    Evaluating Internal liquidity
    e
    Assumptions

    01 Perpetual growth is 3%

    02 Tax rate 17.52%

    03 Weighted Average Cost of


    Capital(WACC) 7.97%
    Capital expenditure will be
    04 financed from Long term loan.
    Long term loan will be repaid in
    05 next two years by equal
    installments.
    Free Cash Flow Model
    Particulars 2020 2021 2022 2023 2024
    EBIT 308,494,750 471,475,310 720,579,684 1,101,330,053 1,683,317,149
    EBIT (1-tax rate) 254458609.8 388891389.4 594362479.9 908420367.7 1388466227
    Depreciation 25,853,661 39,488,882 60,315,319 92,125,618 140,712,669
    Capital expenditure 31,404,272 34,230,657 37,311,416 40,669,443 44,329,693
    Change in NWC -87,508,040 202,255,779 308,925,477 471,852,773 720,707,925
    Free cash flow 399224582.8 260355149.4 383063737.9 569362655.7 852800664.1
    87,8384,684
    Present value discount factor 0.9139 0.8352 0.7633 0.6976 0.6378
    Present value of free cashflow 364851346.2 217448620.8 292392551.2 397187388.6 543916263.6
    Terminal value 1,127,2308,883

    Enterprise value 13,088,105,053


    Cash 2,529,179
    Interest-bearing debt 162,705,381
    Equity value 12,927,928,851
    Value per share 6035.447643
    Dividend Discount Model
    Year Growth rate Dividend 8% Factor PV
    2019 0.00645
    2020 31% 0.0084495 0.9259 0.0078234
    2021 31% 0.011068845 0.8573 0.0094893
    2022 31% 0.014500187 0.7938 0.0115102
    2023 29% 0.018705241 0.735 0.0137484
    2024 27% 0.023755656 0.6806 0.0161681
    2025 25% 0.02969457 0.6302 0.0187135
    2026 23% 0.036524322 0.5835 0.0213119
    2027 21% 0.044194429 0.5402 0.0238738
    2028 19% 0.052591371 0.5002 0.0263062
    SUM 0.1489449

    Constant growth period 2.78734264

    Present value of high growth period dividends 0.028823


    present value of declining growth period dividend 0.1201219
    Present value of constant growth period dividends 2.787342
    Total present value of dividends 2.9362869
    Thank you

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