Intrinsic value of Sify Technologies ADR - SIFY

Previous Close

$1.89

  Intrinsic Value

$0.60

stock screener

  Rating & Target

str. sell

-69%

Previous close

$1.89

 
Intrinsic value

$0.60

 
Up/down potential

-69%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of SIFY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Sify Technologies ADR (SIFY) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.67
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.84
  5.76
  5.68
  5.62
  5.55
  5.50
  5.45
  5.40
  5.36
  5.33
  5.29
  5.26
  5.24
  5.21
  5.19
Revenue, $m
  276
  301
  327
  355
  383
  412
  443
  475
  508
  542
  578
  615
  654
  694
  736
  779
  825
  872
  922
  974
  1,028
  1,084
  1,144
  1,205
  1,270
  1,338
  1,408
  1,483
  1,560
  1,642
  1,727
Variable operating expenses, $m
 
  282
  307
  333
  359
  387
  415
  445
  476
  508
  542
  577
  613
  651
  690
  731
  774
  818
  865
  913
  964
  1,017
  1,073
  1,131
  1,191
  1,255
  1,321
  1,391
  1,464
  1,540
  1,620
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  262
  282
  307
  333
  359
  387
  415
  445
  476
  508
  542
  577
  613
  651
  690
  731
  774
  818
  865
  913
  964
  1,017
  1,073
  1,131
  1,191
  1,255
  1,321
  1,391
  1,464
  1,540
  1,620
Operating income, $m
  14
  19
  20
  22
  24
  26
  27
  29
  31
  34
  36
  38
  41
  43
  46
  48
  51
  54
  57
  60
  64
  67
  71
  75
  79
  83
  87
  92
  97
  102
  107
EBITDA, $m
  40
  42
  45
  49
  53
  57
  61
  66
  70
  75
  80
  85
  90
  96
  102
  108
  114
  121
  128
  135
  142
  150
  158
  167
  176
  185
  195
  205
  216
  227
  239
Interest expense (income), $m
  0
  2
  2
  3
  3
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
  25
  27
  28
  30
  32
Earnings before tax, $m
  10
  17
  18
  19
  20
  21
  23
  24
  25
  27
  28
  30
  31
  33
  35
  36
  38
  40
  42
  44
  47
  49
  51
  54
  56
  59
  62
  65
  68
  72
  75
Tax expense, $m
  0
  5
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
Net income, $m
  10
  12
  13
  14
  15
  16
  17
  18
  18
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  37
  39
  41
  43
  45
  48
  50
  52
  55

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  24
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  322
  325
  353
  383
  413
  445
  478
  513
  548
  585
  624
  664
  706
  749
  795
  842
  891
  942
  996
  1,052
  1,110
  1,171
  1,235
  1,302
  1,371
  1,445
  1,521
  1,601
  1,685
  1,773
  1,865
Adjusted assets (=assets-cash), $m
  298
  325
  353
  383
  413
  445
  478
  513
  548
  585
  624
  664
  706
  749
  795
  842
  891
  942
  996
  1,052
  1,110
  1,171
  1,235
  1,302
  1,371
  1,445
  1,521
  1,601
  1,685
  1,773
  1,865
Revenue / Adjusted assets
  0.926
  0.926
  0.926
  0.927
  0.927
  0.926
  0.927
  0.926
  0.927
  0.926
  0.926
  0.926
  0.926
  0.927
  0.926
  0.925
  0.926
  0.926
  0.926
  0.926
  0.926
  0.926
  0.926
  0.925
  0.926
  0.926
  0.926
  0.926
  0.926
  0.926
  0.926
Average production assets, $m
  106
  115
  125
  135
  146
  157
  169
  181
  194
  207
  221
  235
  250
  265
  281
  298
  315
  333
  352
  372
  393
  414
  437
  460
  485
  511
  538
  566
  596
  627
  660
Working capital, $m
  11
  49
  53
  58
  62
  67
  72
  77
  83
  88
  94
  100
  107
  113
  120
  127
  134
  142
  150
  159
  168
  177
  186
  196
  207
  218
  230
  242
  254
  268
  281
Total debt, $m
  74
  66
  82
  100
  117
  136
  155
  175
  196
  218
  240
  264
  288
  314
  340
  368
  396
  426
  458
  490
  524
  560
  597
  636
  677
  720
  764
  811
  860
  911
  965
Total liabilities, $m
  199
  190
  206
  224
  241
  260
  279
  299
  320
  342
  364
  388
  412
  438
  464
  492
  520
  550
  582
  614
  648
  684
  721
  760
  801
  844
  888
  935
  984
  1,035
  1,089
Total equity, $m
  124
  135
  147
  159
  172
  185
  199
  213
  228
  244
  260
  276
  294
  312
  331
  350
  371
  392
  414
  438
  462
  487
  514
  542
  571
  601
  633
  666
  701
  738
  776
Total liabilities and equity, $m
  323
  325
  353
  383
  413
  445
  478
  512
  548
  586
  624
  664
  706
  750
  795
  842
  891
  942
  996
  1,052
  1,110
  1,171
  1,235
  1,302
  1,372
  1,445
  1,521
  1,601
  1,685
  1,773
  1,865
Debt-to-equity ratio
  0.597
  0.490
  0.560
  0.630
  0.680
  0.730
  0.780
  0.820
  0.860
  0.890
  0.930
  0.950
  0.980
  1.010
  1.030
  1.050
  1.070
  1.090
  1.100
  1.120
  1.140
  1.150
  1.160
  1.170
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.240
Adjusted equity ratio
  0.386
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416
  0.416

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  10
  12
  13
  14
  15
  16
  17
  18
  18
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  37
  39
  41
  43
  45
  48
  50
  52
  55
Depreciation, amort., depletion, $m
  26
  23
  25
  27
  29
  31
  34
  36
  39
  41
  44
  47
  50
  53
  56
  60
  63
  67
  70
  74
  79
  83
  87
  92
  97
  102
  108
  113
  119
  125
  132
Funds from operations, $m
  6
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  81
  86
  91
  96
  101
  107
  113
  119
  125
  131
  138
  145
  153
  161
  169
  178
  187
Change in working capital, $m
  -20
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
Cash from operations, $m
  26
  31
  34
  37
  39
  42
  45
  49
  52
  55
  59
  63
  66
  70
  75
  79
  84
  88
  93
  98
  104
  109
  115
  121
  128
  134
  141
  149
  156
  164
  173
Maintenance CAPEX, $m
  0
  -21
  -23
  -25
  -27
  -29
  -31
  -34
  -36
  -39
  -41
  -44
  -47
  -50
  -53
  -56
  -60
  -63
  -67
  -70
  -74
  -79
  -83
  -87
  -92
  -97
  -102
  -108
  -113
  -119
  -125
New CAPEX, $m
  -25
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
Cash from investing activities, $m
  -24
  -31
  -33
  -35
  -38
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -81
  -86
  -90
  -95
  -101
  -106
  -111
  -117
  -123
  -129
  -136
  -143
  -150
  -158
Free cash flow, $m
  2
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
Issuance/(repayment) of debt, $m
  1
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  49
  51
  54
Issuance/(repurchase) of shares, $m
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  49
  51
  54
Total cash flow (excl. dividends), $m
  1
  17
  17
  18
  19
  20
  22
  23
  24
  25
  26
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  52
  54
  57
  60
  62
  66
  69
Retained Cash Flow (-), $m
  -12
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -38
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  18
  19
  20
  22
  23
  24
  25
  26
  28
  29
  30
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  5
  5
  5
  5
  6
  6
  6
  6
  6
  5
  5
  5
  5
  4
  4
  4
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Sify Technologies Limited (Sify) is an integrated information and communications technology (ICT) solutions and services company. The Company's segments are Telecom services, which includes domestic data, international data wholesale voice and network managed services; Data Centre services, which includes co-location services; Cloud and managed services, which includes information technology (IT) infra services, IT transformation services, remote and onsite infrastructure managed services and delivery platforms; Technology integration services, which includes data center build, network integration, information security, end-user computing, and collaborative tools and solutions, and Applications integration services, which includes application development and maintenance, application testing, mobility solutions, e-learning, portals, tools, process and automation. The Company has approximately six Tier III data centers across various geographical locations in India.

FINANCIAL RATIOS  of  Sify Technologies ADR (SIFY)

Valuation Ratios
P/E Ratio 33.7
Price to Sales 1.2
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 13
Price to Free Cash Flow 337.4
Growth Rates
Sales Growth Rate 22.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.2%
Cap. Spend. - 3 Yr. Gr. Rate 12.3%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 12.9%
Total Debt to Equity 59.7%
Interest Coverage 0
Management Effectiveness
Return On Assets 3.3%
Ret/ On Assets - 3 Yr. Avg. 2.9%
Return On Total Capital 5.3%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 8.5%
Return On Equity - 3 Yr. Avg. 6.9%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 35.5%
Gross Margin - 3 Yr. Avg. 38.3%
EBITDA Margin 13%
EBITDA Margin - 3 Yr. Avg. 13.3%
Operating Margin 5.1%
Oper. Margin - 3 Yr. Avg. 6%
Pre-Tax Margin 3.6%
Pre-Tax Margin - 3 Yr. Avg. 3.3%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 30%

SIFY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SIFY stock intrinsic value calculation we used $276 million for the last fiscal year's total revenue generated by Sify Technologies ADR. The default revenue input number comes from 2017 income statement of Sify Technologies ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SIFY stock valuation model: a) initial revenue growth rate of 9.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SIFY is calculated based on our internal credit rating of Sify Technologies ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Sify Technologies ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SIFY stock the variable cost ratio is equal to 93.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SIFY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Sify Technologies ADR.

Corporate tax rate of 27% is the nominal tax rate for Sify Technologies ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SIFY stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SIFY are equal to 38.2%.

Life of production assets of 4.1 years is the average useful life of capital assets used in Sify Technologies ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SIFY is equal to 16.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $124 million for Sify Technologies ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 173.542 million for Sify Technologies ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Sify Technologies ADR at the current share price and the inputted number of shares is $0.3 billion.

RELATED COMPANIES Price Int.Val. Rating
IBM International 156.18 173.04  hold
SAP SAP ADR 104.90 85.52  sell
HCHC HC2 Holdings 5.37 0.30  str.sell
ZAYO Zayo Group Hol 37.31 47.38  buy

COMPANY NEWS

▶ Why Did Sify Technologies Limited Stock Rise on Monday?   [Jan-08-18 02:14PM  Motley Fool]
▶ Sify reports revenues of INR 18432 million for FY 2016-17   [Apr-25-17 08:19AM  GlobeNewswire]
▶ 8 Stocks With Strong Yields but Falling Prices   [Feb-14-17 03:00PM  GuruFocus.com]
▶ Sify receives NASDAQ Staff Deficiency letter   [Jan-05-17 07:36AM  GlobeNewswire]
▶ Sify reports revenues of INR 15035 million for FY 2015-16   [Apr-22-16 08:38AM  GlobeNewswire]
▶ Industry Leading Suite of Security Challenges   [Mar-23-16 04:29AM  at noodls]
▶ Sify shareholders approve dividend payment of 10%   [Jun-19  01:56AM  GlobeNewswire]
▶ Sify reports revenues of INR 12864 million for FY 2014-15   [Apr-23  09:16AM  GlobeNewswire]
Financial statements of SIFY
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.