FORCE MOTORS LTD - Quantamental Equity Research

Quantamental Equity Research on FORCE MOTORS LTD | Release: 06 Dec 2018 17:39:55 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:Not Listed and BSE CODE:500033
Last Close:  INR 1656.7
Fair Value:  INR 1194.5
Est. Price by Mar 19:  INR 1975.7
Market Capitalization (INR Crs):  2183.53
Industry:  Cars & Utility Vehicles
Rating:  BUY
Upside:  19%
Company Profile
Force Motors is a fully, vertically integrated automobile company, with expertise in design, development and manufacture of the full spectrum of automotive components, aggregates and vehicles. Its range of products includes Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV), Sports Utility Vehicles (SUV) and Agricultural Tractors.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 12% 34% 55%  
EBIT % -14% 57% 656%  
Earnings % -18% 45% 929%  
Book Value %  8% 37% 56%  
Stock Total Return %  -36% 86% 709%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 61.06  
(B) FII/FPI 4.88  
(C) DII/Insurance Companies 3.40  
(D) Public holding < 2 lakhs of cap. 23.91  
(E) Others 6.75  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 364 761 485 365 374 1588 3209 4604 2952 1976 2400 2744 3061 3348  
Return on Equity 21% 18% 72% 1% 6% 8% 12% 11% 8% 8% 9% 9% 9% 9%  
Price to Earning  8.0 17.2 0.8 33.8 6.4 20.7 23.7 33.8 26.5 17.2 17.2 17.2 17.2 17.2  
EVTI 0.5 0.8 0.2 0.3 0.3 0.9 1.4 2.0 1.1 0.6 0.7 0.7 0.6 0.6  
EVTIFM 8.0 17.2 0.8 33.8 6.4 20.7 23.7 33.8 26.5 17.2 17.2 17.2 17.2 17.2  
Price to Book Value 1.7 3.0 0.6 0.4 0.4 1.6 2.9 3.7 2.2 1.3 1.5 1.6 1.6 1.6  
Debt to Equity  0.5 0.7 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0  
Dividend Yield 1% 1% 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%  
Cash Flow to Firm -3% -3% 50% 10% -7% 4% 3% -2% 8% 15% 14% 14% 14% 14%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales       3,430.19       3,711.84       3,986.82       4,250.17       4,496.80       4,721.64  
EBITDA          336.16          376.47          404.35          431.06          456.08          478.88  
EBIT          206.90          236.59          279.33          319.31          356.19          389.60  
PBT          200.23          229.92          279.33          319.31          356.19          389.60  
NPAT          146.95          151.77          184.39          210.78          235.12          257.17  
Price to Earning             26.55            17.16            17.16            17.16            17.16            17.16  
Price to Book Value              2.17              1.34              1.50              1.57              1.60              1.60  
Debt to Equity               0.00                 -                   -                   -                   -                   -    
Return on Equity              0.08              0.08              0.09              0.09              0.09              0.09  
Enterprise Value to Total Income (EVTI)              1.11              0.62              0.65              0.65              0.65              0.63  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            42.89            27.27            26.08            24.40            22.92            21.55  
Price or Est. Share Prices       2,952.19       1,975.70       2,400.30       2,743.90       3,060.80       3,347.90  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT          229.92          279.33          319.31          356.19          389.60  
Interest              6.67                 -                   -                   -                   -    
Depreciation          139.87          125.03          111.75            99.89            89.29  
Cash Flow Before Tax          376.47          404.35          431.06          456.08          478.88  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax          248.50          266.91          284.55          301.06          316.11  
Terminal Cash Flow                                                                                    -         1,571.34  
Total Cash Flow          248.50          266.91          284.55          301.06       1,887.45  
Present Value of Cash Flow       1,574.33  
Debt                 -    
Value of Equity       1,574.33  
Fair Value Per Share       1,194.50  
Equity            2,184
Debt                   0
Beta Take from Reuters 1.41
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   7
Tax Benefit                   2
Interest Net of Tax                   5
Debt                   0
Cost of Debt 0%
Cost of Equity 18%
Debt Weight 0%
Equity Weight 100%
WACC 18%
Cash Flow of Mar-23 E          316.11
Growth 4.8%
Present Value of Terminal Cashflow       1,571.34
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Ashok Leyland           103.60          30,412            24.09            31.88            28.40              0.81            13.37              4.30            15.41              0.14              2.34            17.37          100.20          30,481            49.25                 68            21.73            25.21            24.18            42.26
   2  Tata Motors           169.20          53,555          300.42            -5.07              8.55              0.30            40.60              0.56            32.63              0.93                 -              -5.07            -4.75        288,796            35.48               -49              8.11              2.47          -45.80        -133.34
   3  Force Motors        1,656.70            2,184       1,416.34            11.02            11.16              0.60            20.27              1.17            14.01                 -                0.60            10.04              9.09            3,581            61.06                 85            -1.02            -1.30            -3.03            -4.91
   4  SML ISUZU           676.80               979          283.25            -9.11              3.77              0.99          -46.86              2.39            56.03              0.53              0.22            -6.78            -5.88            1,186            43.96             -111          -34.73            30.10        -138.49        -130.36
   5  Maruti Suzuki        7,554.05        228,193       1,423.83            26.95            23.98              2.10            27.22              5.31            28.90                 -                1.06            18.52       1,329.31          91,839            56.21               133            -0.12              3.05            13.42            -9.82
   6  M & M           718.05          89,267          295.81                 -              13.64                 -                   -                2.43            15.58              1.52              1.04                 -                   -                   -              19.28                 -                   -                   -                   -                   -  

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