Sheela Foam Limited Intrinsic Value
SFL · Consumer Durables · Current price ₹616.4
Is Sheela Foam Limited undervalued?
We estimate the fair value of Sheela Foam Limited at ₹464 per share, against a market price of ₹692. That puts the share price about -32.9% above our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Fair multiple (P/E) (₹781), Discounted cash flow (2-stage) (₹147). These methods disagree materially, so the estimate is their midpoint rather than a weighted blend, and the disagreement is part of the finding. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Sheela Foam Limited spans ₹232 to ₹781. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹692 against an estimated value of ₹464, Sheela Foam Limited trades at -32.9%, i.e. a premium to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for Sheela Foam Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹232 – ₹781
Why this method for this business
Relative P/E and DCF are the most appropriate models for SFL, a consumer discretionary company with a durable moat and stable cash flows. These models capture both market sentiment and intrinsic value.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
- PEG is excluded due to insufficient data on growth rates and forward-looking estimates
- DCF is used as the primary model for its ability to capture intrinsic value, while relative P/E provides a market-based valuation
What was missing
- Lack of forward-looking analyst estimates for EBITDA and EPS
- Limited data on the company's capital allocation efficiency
What drives it
27 inputs, grouped by how strong each claim is
- Sector-median P/E
- 38.18×
- Peers used
- 4
- EPS (TTM)
- 19.68 ₹/share
- Own-history median P/E
- 64.88×
- FCF_0 (normalized)
- 152 ₹cr
- Net debt
- 908 ₹cr
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
fcf_norm (median ≤5y positive)
gross debt (cash n/a)
- Discount rate (r)
- 14.78%
- Beta
- 1.05
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 4.86%
- Fade shape
- linear
- Terminal growth (g)
- 4.86%
- Stage-1 years
- 8 y
pat_cagr_5y
lifecycle Mature
macro terminal × quality premium
lifecycle Mature horizon
- Term: quality
- -2.4%
- Term: growth
- -17.8%
- Term: capital_allocation
- -3.0%
- Term: financial_strength
- +9.1%
- Term: history
- +21.0%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
- Lifecycle stage
- Mature
- Quality premium
- 0.971×
quality 50/100 (weak/erratic returns) → discount
weak ~1% CAGR (ROCE 23% > hurdle) → discount
capital allocation: falling ROCE / weak cash generation → discount
financial strength: low leverage (D/E 0.2) → mild premium
history: market paid +70% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
forecast engine (L20)
moat None + capital allocation
- Premium vs sector
- +3.9%
- Fair-multiple confidence
- 66%
- Fair P/E
- 39.66×
- Path
- FCFE
- Terminal-value fraction
- 0.485
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Sheela Foam Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Sheela Foam Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.