Valuation of Genesis Colors Pvt. Ltd.

Submitted by:-
Abhirup Sengupta (251006)
Chetan Khaitan(251020)
Danish Sharma(251021)
Parth Dhingra(251036)
Pavan B Thotad(251038)
Gul Rukh Siddiqui(251088)
 Textile Industry

Indias textiles sector is one of the oldest industries in Indian

Accounts to approximately 15 per cent of total exports.

Labour intensive and is one of the largest employers.

The textile industry employs about 51 million people directly and 68 million people indirectly. India's
overall textile exports during FY 2015-16 stood at US$ 40 billion.
The domestic textile and apparel industry is the
largest contributor to total textile and apparel exports
from India in FY17. The segment had a share of 89.64 %
 Genesis Colors

Established in 1998, Genesis Colors Ltd. is the holding company of well known Indian
fashion brands Satya Paul, Bwitch, Armani, Hugo Boss, Jimmy Choo, etc.

The brand is a pioneer in printed saris and has also moved onto include ready-to-wear and
accessories that have a universal appeal.

With 52 stores in India covering cities like Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata
and Pune.
What is Valuation ?

Valuation is the process of determining the current worth of an asset or a company; there are many
techniques used to determine value.

Things to be taken under consideration:

Company's management.

Composition of its capital structure.

Prospect of future earnings.

Market value of assets.

 DCF Technique
Pros
DCF offers the closest estimate of a stocks intrinsic value. Its considered the most sound valuation method if the analyst is
confident in his or her assumptions.
Unlike other valuation methods, DCF relies on free cash flows, considered to be a reliable measure that eliminates
subjective accounting policies.
DCF isnt significantly influenced by short-term market conditions or non-economic factors.
DCF is particularly useful when theres a high degree of confidence regarding future cash flows.
Cons
DCF valuation is very sensitive to the assumptions/forecasts made by the analyst. Even small adjustments can cause DCF
valuation to vary widely which means the fair value may not be accurate.
DCF tends to be more time-intensive compared with other valuation techniques.
DCF involves forecasting future performance, which can be very difficult, especially if the company isnt operating with
100% transparency.
 Valuation
Steps-

1. Calculation of of the textile industry.

2. Calculation of stock of the Genesis.

3. Calculation of cost of capital and cost of debt

4. Finding the WACC.

5. Calculating the free cash flow.

 Valuation
6. Determining the growth rate of the company.

7. Adding the present and terminal value of cash flows to find the valuation of the
company.
Calculations

Microsof t Excel
Worksheet