Valuing companies is a combination of art and science The DND Flyway (Delhi Noida Direct Flyway) is an eight-laned 9.2 km access controlled tolled expressway which connects Delhi to Noida, an industrial suburb area. It was built and is maintained by The Noida Toll Bridge Company Ltd which we will try to value in this post
We discussed few valuation methodologies for a fast grower like CERA in previous post in today’s post we will try to value a slow grower /annuity kind of business
We will use below methods
| Company Type | Valuation model | Basis | Driven by | Assumptions |
| Slow Growers | Average PE Value Method | The company is valued at its average PE for last 5 years | Earnings | Implicit assumptions that company would trade at average PE |
| Economic Value Method | Current EPS is converted to perpetuity with model discount factor | Earnings | Share is treated as perpetual bond | |
| Liquidating business/ Cyclical / No growth business | Graham Number | Theoretically, the maximum price that a defensive investor should pay for the given stock | Earnings | To be used in bear phase for cyclical business |
| Fast growth Companies | Graham Intrinsic Value | The formula as described by Graham in the 1962 edition of Security Analysis | Earnings | The |