A presentation on-

Valuation of Dhaka Electric Supply

Company Limited
Course Coordinator-
Md. Aftab Uddin Mahmud Chowdhury
Assistant Professor
Department of Banking and Insurance
University of Dhaka
 Group 04
Group list-
Name ID number
Shuvo Costa 005

Prokash Kumar Shaha 017

Danish Ahmed 053

Saima Afreen 061

Sadia Islam 069

Abdullah Al Mamun 075

Maisha Monwar 117

Abdullah Al Mamun
ID : 20-075
 DESCO at a Glance

• It is a Public Limited Company

• It was created on November 1996
• It is serving a total number of 604,304
consumers as of 31 December 2013
 It’s mission-
Bringing comfort
to customers

maintaining the maintaining the

highest degree of highest degree of
responsiveness efficiency

maintaining the
highest degree of
reliability
 Core corporate principles:

Customer Operational Performance

Safety
focus Excellence Driven Culture
 Income Statement for the year ended
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Energy Sales 37820330577 45757305152 55359933211 66977768795 81033723354 98039460537
Other Operating Revenue 756990301 909001523 1091538119 1310729888 1573937557 1573937558
Total Operating Revenue: 38577320878 46666306675 56451471330 68288498683 82607660911 99613398095

Energy Purchase 28956565428 28956565428 28956565428 28956565428 28956565428 28956565428

Operating Expenses 375509078 375509078 375509078 375509078 375509078 881260344
Depreciation(operating) 9245246372 14328922019 23483922070 34558644862 47955653042 63360469486
Cost of Goods Sold: 34941846124 43660996525 52815996576 63890719368 77287727548 93198295258
Gross Profit 2484379464 3005310150 3635474754 4397779315 5319933363 6415102837

Administrative Expenses 43823837 530129244 641288714 775757345 938423028 1066048560

Employee Expenses 1941460293 2381084562 2920257350 3581520424 4392519909 5387162117
Bad Debt Provision 8745255 6555197 -4133082 -9354062 -14575041 -22529670
Depriciation(non operating) 51781887 73414575 996282251 131343072 169713596 216136558

Non Operating Income/(Expenses)

Interest Income 1333661372 1357793148 1207165575 1173044235 1138922895 1046548439
Interest Expenses 39848037 397617260 389004870 380579024 372335683 398480368
Exchange Fluctuation Gain/(Loss) 16119373 17312206 17319477 17326750 17334028 17341308
Miscellaneous Income 24813832 26650055 2821022159 3029777799 3253981356 3494775976
Net Profit Before Tax 1773314733 4183568749 2738281862 3758082296 3871754467 3928470627

Tax Expenses 1266146352 1072416013 701931173 963346816 992485540 1007024161

Tax Provision -183,579,386 -183,579,386 -183,579,386 -183,579,386 -183,579,386 -183,579,386
Net profit after tax 690747767 3111152736 2,219,930,075 2,978,314,866 3,062,848,313 3,105,025,852
Prokash Kumar Shaha
ID : 20-017
 Balance Sheet as at 31st December
2017 2018 2019 2020 2021 2022
Assets
Non -current assets:
P,P&E 12221994595 2726850167 35948946694 46451060841 59157148663 68432989573
Capital work in progress 2469171769 2469171769 2469171769 2469171769 2469171769 2469171769
total 14691166364 5196021936 38418118463 48920232610 61626320432 70902161342
Current assets:
Stores & spares 7622034713 7622034713 7622034713 7622034713 7622034713 7622034713
Accounts Receivables 5418385469 6555487844 7931222527 9354424504 11609415953 14045767985
Advance income tax 1029337057 1029337057 1029337057 1029337057 1029337057 1029337057
Cash & cash equivalent 11973634475 283125589746 46507481602 48400683610 37543758747 32384915824
total current assets 26043391714 298332449360 63090075899 66406479884 57804546470 55082055579
Total Assets: 40734558078 48715471296 101508194362 115326712494 119430866902 125984216921

Equity & Liabilities:

Capital & reserve share capital 3975698644 3975698644 3975698644 3975698644 3975698644 3975698644
Share money deposit 75000000 75000000 75000000 75000000 75000000 75000000
GOB Equity 2722140000 2722140000 2722140000 2722140000 2722140000 2722140000
Retained earnings 9945860791 8578305835 69690712514 70806777302 72007375537 75112401389
total 16718699435 15351144479 76463551158 77579615946 78780214181 81885240033
Long term liabilities:
Long term loans 10534771718 10534771718 10534771718 10534771718 10534771718 10534771718
Deferred Tax liability 1928129606 1928129606 1928129606 1928129606 1928129606 1928129606
Due to DESA/ DPDC 4039671539 4039671539 4039671539 4039671539 4039671539 4039671539
Consumer security deposits 1894489374 1894489374 1894489374 1894489374 1894489374 1894489374
total 18397062237 18397062237 18397062237 18397062237 18397062237 18397062237
Current liabilities:
Accounts Payable 297649030 9462721397 11446899995 13847143339 16750699512 20199023679
Creditors for goods 73862775 73862775 73862775 73862775 73862775 73862775
Creditors for other finance 1736963946 1736963946 1736963946 1736963946 1736963946 1736963946
Creditors for Expenses 623383474 623383474 623383474 623383474 623383474 623383474
Current maturity of long term loans 756774594 756774594 756774594 756774594 756774594 756774594
Accrued interest on loans 1568076098 1568076098 1568076098 1568076098 1568076098 1568076098
Provision for income tax 745665875 745665875 745665875 745665875 745665875 745665875
Tax payable -183579386 -183579 -1835790 -1835790 -1835790 -1835790
total current liabilities 5618796406 14967264580 6647580967 19350034311 22253590484 25701914651
total liabilities & equities 40734558078 48715471296 101508194362 115326712494 119430866902 125984216921
Danish Ahmed
ID : 20-053
 Valuation of Dhaka Electric Supply Company Limited

2017 2018 2019 2020 2021 2022

sales 37820330577 45757305152 55359933211 66977768795 81033723354 98039460537

net income 3673177794 3111152736 2036350689 2794735480 2879268927 3105025852
net working capital 20424595308 283365184780 56442494932 644714745573 555791855986 38655981838
fixed assets 14691166364 5196021936 38418118463 48920232610 61626320432 68432989573
total operationg assets 35115761672 288561206716 94860613395 693634978183 617418176418 64357896489
long term liabilities 18397062237 18397062237 18397062237 18397062237 18397062237 18397062237
total stockholders equity 16718699435 15351144479 76463551158 77579615946 78780214181 81885240033

Residual Income computation

Net income 3673177794 3111152736 2036350689 2794735480 2879268927 3105025852
Beginning equity 16222679453 16718699435 15351144479 76463551158 77579615946 78780214181
Required equity return 11% 11% 11% 11% 11% 11%
expected income 1135587562 1170308960 1074580114 5352448581 5430573116 5514614993
Residual Income 2537590232 1940843776 961770575 -2557713101 -2551304189 -2409589141
discount factor 0.9009 0.8116 0.7312 0.6587 0.5935

Present value of residual income 2286115040 1575188808 703246644.8 -1684765620 -1514199036

Cumulative PV of RI 2286115040 3861303849 4564550493 2879784874 1365585837
Terminal Value of RI 2648191164
Beginning book value of equity 16222679453
Value of equity 18722257418
Common shares outstanding 397569804
Value of equity per share 47.091749
Maisha Monwar
ID : 20-117
 Cash flow statement ratios:

1. Current liability coverage= (CFO – cash

dividends paid ) / Current liability
= (3,275,151,550- 501,453,400)÷
11,607,954,305
= 0.23894806
2. Long term debt coverage = ( CFO – cash
dividends paid) / Long term debt
= (3,275,151,550- 501,453,400)÷ 10,534,771,718
=0.3
3.Interest coverage = CFO +Cash payment for
interest and income tax
=(3275151550+199,509,265+242,879,318)÷
199,509,265
=18.6
4. Earnings Quality = CFO + cash payment for
interest and income tax/ Net income + interest
expense + income tax expense
=(3275151550+199,509,265+242,879,318)÷
446,181,845+242
=5.395080049
5. Asset efficiency ratio = CFO / Total assets
= 3,275,151,550÷ 44,729,208,274
=0.1
Sadia Islam
ID : 20-069
 Ratios-
• Liquidity ratios:
1.Current ratio = Current assets / Current
liabilities
=2.42
2. Quick ratio = Cash and cash equivalent
+Marketable securities+ Accounts receivables
=1.52
Capital structure and solvency ratios:

Debt to equity ratio=

=56:44

Asset utilization:
Accounts receivable turnover=

=1.61
Operating performance:

Gross profit margin=

= 6.28%

Net profit margin=

= 1.43
Return on investment:

Return on assets=

=1.07
Return on equity=

=2.42
Market measures:

Net asset value per share=

= 37.05

Earnings per share=

= 1.12
 Findings-
 The intrinsic value of DESCO in the year 2017
is Tk. 47
 The shares of DESCO is trading at Tk.50 in DSE
right now.
 Company’s financial performance is ok.
 Recommendations:

Current market
Intrinsic value
price

•Tk. 47 •Tk. 50

Overpriced share
THANK YOU