valuation report_sample cricil
XYZ Company Limited
Date
Valuation Report: DUMMY
Executive Summary
INDUSTRY: XX
XYZ Company Limited (hereinafter referred to as “XYZ” or “the company”) is a XX manufacturing company and markets its products under the brand name XX in the XX region of India.
Business valuation summary of XYZ
Multiple used
EV/tonne method
Equity value Rs mn Value per share (Rs)
Rs 5,809 per tonne
EV/EBITDA method
4.5x
Discounted Cash Flow method
NA
Book value (FY10)
NA
Equity value of Rs 100 based on EV/tonne metric
The XX industry is inherently cyclical in nature and the most preferred valuation method for this industry is
EV/tonne. As XYZ is a regional XX player, we are benchmarking it against the EV/tonne of the listed regional players, which are currently trading at Rs 4,840 per tonne of capacity. We have valued XYZ at a
20% premium to the listed regional players as XYZ enjoys significantly higher EBITDA per tonne. XYZ’s
EBITDA per tonne is __ (FY10) as against the industry average of Rs 1,255 during the same period. After
XYZ, the next highest EBITDA per tonne amongst the listed peers is ABC (ticker:, Rs 1,870) Rs 1,455.
DCF and EV/tonne methodology give similar valuations, while EV/EBITDA gives a higher valuation.
However, we note that EBITDA is highly sensitive to industry cycles and hence prefer to use EV/tonne.
Valuation factors in future capex plans
The company has plans to expand its grinding capacity from __ mn tonnes to __ mn tonnes by the second half of FY12 and clinker capacity from __ mn tonnes to __ mn tonnes. According to the management, the company intends to fund one-third of the capex of Rs __ mn by internal accruals and the balance by debt, for which it has already tied-up with banks. Accordingly, our valuation is based on the expanded capacity.
Key risks
Factors affecting raw material price realisations: XYZ currently enjoys higher…..
Geographic concentration risks: The company’s plant is at a single
Date
Valuation Report: DUMMY
Executive Summary
INDUSTRY: XX
XYZ Company Limited (hereinafter referred to as “XYZ” or “the company”) is a XX manufacturing company and markets its products under the brand name XX in the XX region of India.
Business valuation summary of XYZ
Multiple used
EV/tonne method
Equity value Rs mn Value per share (Rs)
Rs 5,809 per tonne
EV/EBITDA method
4.5x
Discounted Cash Flow method
NA
Book value (FY10)
NA
Equity value of Rs 100 based on EV/tonne metric
The XX industry is inherently cyclical in nature and the most preferred valuation method for this industry is
EV/tonne. As XYZ is a regional XX player, we are benchmarking it against the EV/tonne of the listed regional players, which are currently trading at Rs 4,840 per tonne of capacity. We have valued XYZ at a
20% premium to the listed regional players as XYZ enjoys significantly higher EBITDA per tonne. XYZ’s
EBITDA per tonne is __ (FY10) as against the industry average of Rs 1,255 during the same period. After
XYZ, the next highest EBITDA per tonne amongst the listed peers is ABC (ticker:, Rs 1,870) Rs 1,455.
DCF and EV/tonne methodology give similar valuations, while EV/EBITDA gives a higher valuation.
However, we note that EBITDA is highly sensitive to industry cycles and hence prefer to use EV/tonne.
Valuation factors in future capex plans
The company has plans to expand its grinding capacity from __ mn tonnes to __ mn tonnes by the second half of FY12 and clinker capacity from __ mn tonnes to __ mn tonnes. According to the management, the company intends to fund one-third of the capex of Rs __ mn by internal accruals and the balance by debt, for which it has already tied-up with banks. Accordingly, our valuation is based on the expanded capacity.
Key risks
Factors affecting raw material price realisations: XYZ currently enjoys higher…..
Geographic concentration risks: The company’s plant is at a single