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Brief Commentary On Aurangabad Distillery Limited's (NSE:AURDIS) Fundamentals

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Aurangabad Distillery Limited (NSE:AURDIS), there's is a financially-sound company with an impressive track record of performance, trading at a discount. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Aurangabad Distillery here.

Undervalued with proven track record

In the past couple of years, AURDIS has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, AURDIS also outperformed its industry, which delivered a growth of 16%. This is an notable feat for the company. AURDIS's has produced operating cash levels of 0.74x total debt over the past year, which implies that AURDIS's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. Debt funding requires timely payments on interest to lenders. AURDIS’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.

NSEI:AURDIS Income Statement, October 13th 2019

AURDIS's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of AURDIS's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the food, beverage & tobacco industry, AURDIS is also trading below its peers, relative to earnings generated. This supports the theory that AURDIS is potentially underpriced.

NSEI:AURDIS Price Estimation Relative to Market, October 13th 2019

Next Steps:

For Aurangabad Distillery, I've compiled three key factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for AURDIS’s future growth? Take a look at our free research report of analyst consensus for AURDIS’s outlook.
  2. Dividend Income vs Capital Gains: Does AURDIS return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AURDIS as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AURDIS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.