Welspun Enterprises Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (5x coverage).
• Welspun Enterprises's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Welspun Enterprises's dividend is above the markets top 25% of dividend payers in India (3.08%).

Cons

• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

future

Pros

• Welspun Enterprises's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Welspun Enterprises's earnings are expected to exceed the low risk growth rate next year.
• Performance (ROE) is expected to be above the current IN Construction industry average.
• An improvement in Welspun Enterprises's performance (ROE) is expected over the next 3 years.
• Welspun Enterprises's revenue growth is expected to exceed the India market average.

Cons

• Welspun Enterprises's earnings are expected to grow by 10.3% yearly, however this is not considered high growth (20% yearly).
• Welspun Enterprises's earnings growth is positive but not above the India market average.
• Welspun Enterprises's net income is expected to increase but not above the 50% threshold in 2 years time.
• Welspun Enterprises is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Welspun Enterprises's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Welspun Enterprises's revenue is expected to grow by 8.6% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Welspun Enterprises is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Welspun Enterprises is profitable, therefore cash runway is not a concern.
• Welspun Enterprises is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 1.8x debt.
• Welspun Enterprises's cash and other short term assets cover its long term commitments.
• Welspun Enterprises earns more interest than it pays, coverage of interest payments is not a concern.
• Low level of unsold assets.

Cons

• Operating cash flow is negative therefore debt is not well covered.
• The level of debt compared to net worth has increased over the past 5 years (29.2% vs 51.4% today).
• Welspun Enterprises's level of debt (51.4%) compared to net worth is high (greater than 40%).

management

Pros

• The tenure for the Welspun Enterprises board of directors is about average.
• Sandeep's compensation has been consistent with company performance over the past year, both up more than 20%.
• The tenure for the Welspun Enterprises management team is about average.

Cons

• Sandeep's remuneration is higher than average for companies of similar size in India.

misc

Pros

Cons

• Welspun Enterprises is covered by less than 3 analysts.
• Welspun Enterprises has significant price volatility in the past 3 months.

past

Pros

• Welspun Enterprises has delivered over 20% year on year earnings growth in the past 5 years.
• Welspun Enterprises has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).
• Welspun Enterprises's earnings growth has exceeded the IN Construction industry average in the past year (17.5% vs 2.3%).

Cons

• Welspun Enterprises's 1-year earnings growth is less than its 5-year average (17.5% vs 45.6%)
• Welspun Enterprises used its assets less efficiently than the IN Construction industry average last year based on Return on Assets.
• Welspun Enterprises has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).

value

Pros

• Welspun Enterprises is good value based on expected growth next year.
• Welspun Enterprises is good value based on earnings compared to the IN Construction industry average.
• Welspun Enterprises is good value based on earnings compared to the India market.
• NSEI:WELENT is up 7.6% along with the Construction industry (7.1%) over the past month.
• NSEI:WELENT is up 7.6% along with the India market (8%) over the past month.

Cons

• Welspun Enterprises's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Welspun Enterprises's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Welspun Enterprises is overvalued based on assets compared to the IN Construction industry average.
• WELENT underperformed the Construction industry which returned -40% over the past year.
• WELENT underperformed the Market in India which returned -14.5% over the past year.