Publicação
Equity valuation: Hindustan Aeronautics Ltd.
| Resumo: | This thesis seeks to determine the fair value of Hindustan Aeronautics Limited shares as of March 31st, 2024. The estimated fair value is then compared to its market value to determine if the company is undervalued or overvalued in the market on the date in question. For this endeavour, the report leverages company filings and industry reports to deploy two valuation techniques: the discounted cash flow (DCF) method and relative valuation. The DCF method was based on the Free Cash Flow to the Firm. The cash flow estimations for 2025 to 2030 were based on a detailed analysis of the company's historical data from 2020 to 2024, incorporating macroeconomic and industry-specific trends. Lastly, the report provides insights into the performance of the Indian defence sector and highlights potential catalysts that can supplement the long-term growth of Hindustan Aeronautics Limited. The analysis using both valuation methods indicates that the stock was overvalued compared to its fair value. The stock price on the date of the analysis was 3,327, whereas the fair value computed from the DCF valuation methods was 2,885, implying a potential downside of 13%. The relative valuation analysis also complements the findings from the DCF model, implying an overvaluation of HAL's stock. The P/E, EV/EBITDA, and EV/EBIT ratios all suggest that the current market price is higher than our calculated fair value estimates. The confluence between these different valuation methods reinforces our view that the stock is currently priced above its fundamental value in the market. |
|---|---|
| Autores principais: | Rawat, Dhananjay |
| Assunto: | Hindustan Aeronautics Ltd. Avaliação -- Evaluation DCF Discounted Cash Flow -- WACC Terminal value Multiples |
| Ano: | 2024 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | ISCTE |
| Idioma: | inglês |
| Origem: | Repositório ISCTE |
| Resumo: | This thesis seeks to determine the fair value of Hindustan Aeronautics Limited shares as of March 31st, 2024. The estimated fair value is then compared to its market value to determine if the company is undervalued or overvalued in the market on the date in question. For this endeavour, the report leverages company filings and industry reports to deploy two valuation techniques: the discounted cash flow (DCF) method and relative valuation. The DCF method was based on the Free Cash Flow to the Firm. The cash flow estimations for 2025 to 2030 were based on a detailed analysis of the company's historical data from 2020 to 2024, incorporating macroeconomic and industry-specific trends. Lastly, the report provides insights into the performance of the Indian defence sector and highlights potential catalysts that can supplement the long-term growth of Hindustan Aeronautics Limited. The analysis using both valuation methods indicates that the stock was overvalued compared to its fair value. The stock price on the date of the analysis was 3,327, whereas the fair value computed from the DCF valuation methods was 2,885, implying a potential downside of 13%. The relative valuation analysis also complements the findings from the DCF model, implying an overvaluation of HAL's stock. The P/E, EV/EBITDA, and EV/EBIT ratios all suggest that the current market price is higher than our calculated fair value estimates. The confluence between these different valuation methods reinforces our view that the stock is currently priced above its fundamental value in the market. |
|---|