Hi Sunil,
In my limited and flawed view this is too hypothetical a scenario :).
Need to get into the specifics of the business the company is in (Business model, Competitive advantage, pricing power, relationship with suppliers etc). you would have to take a qualitative call on the nature of the business.
Purely from a valuation perspective, i have not been in favor of using earnings to arrive at a intrinsic value range (especially given the fact that Profits are so inconsistent across the years). For example what would explain a drop in profits from 200 cr to 10 cr the next year.
Maybe a safer way would be to determine the growth in book value factoring in future investments to be made and the dividend expected to be paid out. (Playing it safe assuming the company was to be liquidated what would the investors get out). In addition you should also look at Enterprise value of the company (which takes care of Cash balance and debt levels).
Also would be important to look at Cash Flow patterns (Free cash flows, Op cash flow and how much of the business is self funded for future growth without needing additional capital).
Regards,
Pulak
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