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the exact format as "Safal Niveshak's Stock Analysis Excel Ver. 4.0". Now onwards, any excel you export for any company on S
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IMPORTANT INSTRUCTIONS
1. Ensure that the company whose data you are downloading has numbers at least starting from FY08 (March 2008). This is be
from, say, FY10, you will see incorrect data for FY08 and FY09 (which will be of Hero Motocorp on whose financials I have crea
2. All financial data of your chosen company will be automatically updated in the sheet you download, except "Cash and Bank"
figures, which you must update manually from the company's annual reports. Don’t forget to make these changes as these num
3. You may update the sheet and add your own analysis, formulae etc. and then upload again to Screener.in site using the Step
"Data Sheet" because this will cause errors in your future downloads.
4. DON’T touch any cell except the black ones, where you are required to update the numbers manually from Annual Reports (j
the growth assumptions etc.
4. I have added Comments and Instructions wherever necessary so as to explain the concepts. Read those carefully before wo
5. This sheet is not a replacement of the work required to read annual reports as part of the analysis process. So please do tha
some discrepancy in numbers (though rare), but you will know this only when you read annual reports.
6. I could not find a bug/errors in this spreadsheet, but if you notice some, please email me at - vishal@safalniveshak.com - and
7. I will keep on updating the sheet from time to time and will update the same on the website. I invite you to share your feedba
together.
8. This excel won't work for banking and financial services companies.
Conclusion
Never Forget
Buffett Checklist - Read, Remember, Follow!
Source - Buffettology by Mary Buffett & David Clark
Explanation
Seek out companies that have no or less competition, either due to a patent or brand name or similar intangible that
makes the product unique. Such companies will typically have high gross and operating profit margins because of their
unique niche. However, don't just go on margins as high margins may simply highlight companies within industries with
traditionally high margins. Thus, look for companies with gross, operating and net profit margins above industry norms.
Also look for strong growth in earnings and high return on equity in the past.
Try to invest in industries where you possess some specialized knowledge (where you work) or can more effectively
judge a company, its industry, and its competitive environment (simple products you consume). While it is difficult to
construct a quantitative filter, you should be able to identify areas of interest. You should "only" consider analyzing
those companies that operate in areas that you can clearly grasp - your circle of competence. Of course you can
increase the size of the circle, but only over time by learning about new industries. More important than the size of the
circle is to know its boundaries.
Seeks out companies with conservative financing, which equates to a simple, safe balance sheet. Such companies
tend to have strong cash flows, with little need for long-term debt. Look for low debt to equity or low debt-burden ratios.
Also seek companies that have history of consistently generating positive free cash flows.
Rising earnings serve as a good catalyst for stock prices. So seek companies with strong, consistent, and expanding
earnings (profits). Seek companies with 5/10 year earnings per share growth greater than 25% (along with safe
balance sheets). To help indicate that earnings growth is still strong, look for companies where the last 3-years
earnings growth rate is higher than the last 10-years growth rate. More important than the rate of growth is the
consistency in such growth. So exclude companies with volatile earnings growth in the past, even if the "average"
growth has been high.
Like you should stock to your circle of competence, a company should invest its capital only in those businesses within
its circle of competence. This is a difficult factor to screen for on a quantitative level. Before investing in a company,
look at the company’s past pattern of acquisitions and new directions. They should fit within the primary range of
operations for the firm. Be cautious of companies that have been very aggressive in acquisitions in the past.
Buffett prefers that firms reinvest their earnings within the company, provided that profitable opportunities exist. When
companies have excess cash flow, Buffett favours shareholder-enhancing maneuvers such as share buybacks. While
we do not screen for this factor, a follow-up examination of a company would reveal if it has a share buyback plan in
place.
Seek companies where earnings have risen as retained earnings (earnings after paying dividends) have been
employed profitably. A great way to screen for such companies is by looking at those that have had consistent
earnings and strong return on equity in the past.
Consider it a positive sign when a company is able to earn above-average (better than competitors) returns on equity
without employing much debt. Average return on equity for Indian companies over the last 10 years is approximately
16%. Thus, seek companies that earn at least this much (16%) or more than this. Again, consistency is the key here.
That's what is called "pricing power". Companies with moat (as seen from other screening metrics as suggested above
(like high ROE, high grow margins, low debt etc.) are able to adjust prices to inflation without the risk of losing
significant volume sales.
Companies that consistently need capital to grow their sales and profits are like bank savings account, and thus bad
for an investor's long term portfolio. Seek companies that don't need high capital investments consistently. Retained
earnings must first go toward maintaining current operations at competitive levels, so the lower the amount needed to
maintain current operations, the better. Here, more than just an absolute assessment, a comparison against
competitors will help a lot. Seek companies that consistently generate positive and rising free cash flows.
Sensible investing is always about using “folly and discipline” - the discipline to identify excellent businesses, and wait
for the folly of the market to drive down the value of these businesses to attractive levels. You will have little trouble
understanding this philosophy. However, its successful implementation is dependent upon your dedication to learn and
follow the principles, and apply them to pick stocks successfully.
Net Block 546 673 766 1,168 1,207 1,392 1,400 1,298 1,255 1,219
Capital Work in Progress 138 116 58 74 117 47 32 44 68 116
Investments 61 17 17 51 52 17 16 16 16 271
Other Assets 4,746 4,811 5,003 5,084 5,203 5,732 5,526 6,198 6,536 7,416
Total 5,490 5,617 5,843 6,378 6,580 7,188 6,974 7,557 7,875 9,022
Working Capital 1,360 1,603 1,583 1,241 1,549 1,842 1,735 2,249 2,548 2,605
Debtors 2,976 2,858 2,926 3,083 3,264 3,236 3,158 3,391 2,971 2,788
Inventory 643 729 698 926 920 989 894 940 940 1,154
Cash & Bank** 4,735 3,367 3,190 3,393 2,605 3,546 4,739 5,829
** Manually enter this number; Convert to Rs Crore if not already done in the Annual Reports; Use Cash+Bank+Current Investments from Consolidated Balance Sheet in Annual Reports
Debtor Days 159 167 170 151 158 153 149 152 125 112
Inventory Turnover 11 9 9 8 8 8 9 9 9 8
Fixed Asset Turnover 12.5 9.3 8.2 6.4 6.3 5.5 5.5 6.3 6.9 7.5
Debt/Equity 0.0 - - - 0.1 0.2 0.1 0.2 0.2 0.2
Return on Equity 26% 15% 3% 7% 5% 7% 8% 10% 11% 12%
Return on Capital Employed 42% 24% 6% 12% 9% 12% 15% 16% 18% 17%
Profit & Loss Account / Income Statement
ABB INDIA LTD
Rs Cr Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Trailing
Sales 6,833 6,234 6,285 7,447 7,562 7,719 7,730 8,136 8,642 9,087 8,696
% Growth YOY -9% 1% 18% 2% 2% 0% 5% 6% 5%
Expenses 6,049 5,681 6,179 7,091 7,212 7,230 7,154 7,402 7,932 8,334 8,030
Material Cost (% of Sales) 30% 30% 41% 68% 65% 64% 62% 60% 58% 60% Check for wide fluctuations in key
Power and Fuel 0% 0% 0% 1% 1% 1% 1% 1% 1% 1% expense items. For manufacturing
Other Mfr. Exp 44% 44% 36% 7% 7% 7% 6% 7% 8% 8% firms, check their material costs etc. For
Employee Cost 6% 6% 8% 8% 8% 9% 9% 9% 9% 9% services firms, look at employee costs.
Selling and Admin Cost 7% 7% 8% 10% 10% 10% 13% 13% 13% 13%
Operating Profit 784 553 106 356 350 489 576 734 710 754 666
Operating Profit Margin 11% 9% 2% 5% 5% 6% 7% 9% 8% 8% 8%
Other Income 130 65 81 38 7 3 14 6 122 114 235
Other Income as % of Sales 1.9% 1.0% 1.3% 0.5% 0.1% 0.0% 0.2% 0.1% 1.4% 1.3% 2.7%
Depreciation 37 49 52 80 94 103 113 160 151 158 119
Interest 49 44 35 46 57 116 122 106 108 88 65
Interest Coverage(Times) 18 13 4 7 5 3 4 5 6 8 12
Profit before tax (PBT) 829 526 100 268 206 272 355 475 573 622 717
% Growth YOY -37% -81% 167% -23% 32% 30% 34% 21% 8%
PBT Margin 12% 8% 2% 4% 3% 4% 5% 6% 7% 7% 8%
Tax 286 173 37 83 69 96 127 175 199 202 206
Net profit 543 353 63 185 137 177 229 300 374 420 511
% Growth YOY -35% -82% 192% -26% 29% 29% 31% 25% 12%
Net Profit Margin 8% 6% 1% 2% 2% 2% 3% 4% 4% 5% 6%
EPS 25.6 16.7 3.0 8.7 6.5 8.3 10.8 14.2 17.7 19.8 24.1
% Growth YOY -35% -82% 192% -26% 29% 29% 31% 25% 12%
Price to earning 18.3 48.5 253.6 78.5 106.9 76.9 119.0 72.6 62.3 76.1 53.8
Price 468 809 757 683 693 642 1,283 1,027 1,101 1,509 1,297
Dividend Payout 8.5% 12.0% 67.0% 34.4% 46.3% 35.9% 34.3% 26.1% 22.6% 22.2%
Market Cap 9,927 17,137 16,033 14,478 14,692 13,609 27,183 21,764 23,325 31,977
Retained Earnings 497 311 21 121 74 113 150 221 290 327
Buffett's $1 Test 10.4
Check for long term vs short term trends here. Check if the growth over
past 3 or 5 years has slowed down / improved compared to long term (7
to 10 years) growth numbers.
Cash Flow Statement
ABB INDIA LTD
Rs Cr Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Total
Cash from Operating Activity (CFO) 20 354 221 118 -50 330 479 382 863 800 3,516
% Growth YoY 1701% -38% -46% -143% -757% 45% -20% 126% -7%
Cash from Investing Activity -225 -99 -99 -361 -340 -209 -148 -76 -68 -327 -1,952
Cash from Financing Activity -90 -80 -67 -80 211 119 -422 42 -179 -171 -717
Net Cash Flow -295 176 55 -323 -179 240 -91 347 615 302 848
CFO/Sales 0% 6% 4% 2% -1% 4% 6% 5% 10% 9%
CFO/Net Profit 4% 100% 349% 64% -37% 187% 210% 127% 230% 190%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -295 143 -143 -447 -657 -607 -677 -1,256 -375 -24 -4,340
Average FCF (3 Years) -552
FCF Growth YoY -148% -200% 212% 47% -8% 12% 86% -70% -94%
FCF/Sales -4% 2% -2% -6% -9% -8% -9% -15% -4% 0%
FCF/Net Profit -54% 40% -227% -242% -478% -343% -296% -419% -100% -6%
Operating Margin 11.5% 8.9% 1.7% 4.8% 4.6% 6.3% 7.5% 9.0% 8.2%
PBT Margin 12.1% 8.4% 1.6% 3.6% 2.7% 3.5% 4.6% 5.8% 6.6%
Net Margin 7.9% 5.7% 1.0% 2.5% 1.8% 2.3% 3.0% 3.7% 4.3%
Debtor Days 159.0 167.3 169.9 151.1 157.6 153.0 149.1 152.1 125.5
Inventory Turnover 10.6 8.5 9.0 8.0 8.2 7.8 8.6 8.7 9.2
Fixed Asset Turnover 12.5 9.3 8.2 6.4 6.3 5.5 5.5 6.3 6.9
Debt/Equity 0.0 - - - 0.1 0.2 0.1 0.2 0.2
Debt/Assets 0.0% 0.0% 0.0% 0.0% 5.0% 8.6% 5.3% 7.9% 7.6%
Interest Coverage (Times) 17.8 12.9 3.9 6.8 4.6 3.3 3.9 5.5 6.3
Return on Equity 25.8% 14.7% 2.6% 7.3% 5.3% 6.6% 8.1% 10.0% 11.4%
Return on Capital Employed 41.7% 23.7% 5.6% 12.4% 9.0% 11.8% 15.0% 16.1% 17.5%
Free Cash Flow (Rs Cr) -295 143 -143 -447 -657 -607 -677 -1,256 -375
Dec/17
5.2%
8.5%
12.1%
10.0%
-7.3%
-93.5%
8.3%
6.8%
4.6%
112.0
7.9
7.5
0.2
6.7%
8.0
11.6%
16.9%
-24
What to look for?
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher isn't always better, esp. when the company is generating high ROE, which means the management is allocating capital
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
Higher is better, but also look for long term stability and consistency, plus the nature of the industry. Also compare with industry
10,000
Revenue Revenue and Pro
250%
Check for a ris
9,000 Check for a rising trend. Compare grow
200%
8,000
7,000 150%
6,000
100%
5,000
4,000 50%
3,000 0%
2,000 Jan/09 Jan/11
1,000 -50%
- -100%
Jan/08 Jan/10 Jan/12 Jan/14 Jan/16 Revenue Growth
Net Profit Grow
Management Effectiveness
Dec/08 Dec/09 Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16
ROE 26% 15% 3% 7% 5% 7% 8% 10% 11%
ROCE 42% 24% 6% 12% 9% 12% 15% 16% 18%
Cash Flows
Dec/08 Dec/09 Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16
Operating Cash Flow 20 354 221 118 -50 330 479 382 863
Free Cash Flow -295 143 -143 -447 -657 -607 -677 -1,256 -375
%
Capital Allocation Quality
Check for a rising trend and/or consistency.
Numbers > 20% long term are good. Also check if the company
% has zero/marginal debt. Compare with a close competitor Note: Please ignore the dates
% on the X-axis. The figures are
for/as on the year ending date,
% which for most Indian
companies would be 31st
% March of that year
%
Jan/08 Jan/10 Jan/12 Jan/14 Jan/16
ROE ROCE
%
%
%
%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17
%
%
Revenue Growth PBT Growth
Net Profit Growth
Dec/17
12%
17%
Dec/17
9,087
622
420
Dec/17
800
-24
Common Size P&L
Rs Cr Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw Material Cost 30% 30% 41% 68% 65% 64% 62% 60% 58% 60%
Change in Inventory 1% 1% 0% 1% 0% 0% -1% 1% -1% 1%
Power and Fuel 0% 0% 0% 1% 1% 1% 1% 1% 1% 1%
Other Mfr. Exp 44% 44% 36% 7% 7% 7% 6% 7% 8% 8%
Employee Cost 6% 6% 8% 8% 8% 9% 9% 9% 9% 9%
Selling and Admin Cost 7% 7% 8% 10% 10% 10% 13% 13% 13% 13%
Other Expenses 2% 4% 5% 3% 4% 3% 1% 2% 3% 2%
Operating Profit 9% 7% 1% 3% 5% 6% 9% 8% 10% 7%
Other Income 2% 1% 1% 1% 0% 0% 0% 0% 1% 1%
Depreciation 1% 1% 1% 1% 1% 1% 1% 2% 2% 2%
Interest 1% 1% 1% 1% 1% 2% 2% 1% 1% 1%
Profit Before Tax 12% 8% 2% 4% 3% 4% 5% 6% 7% 7%
Tax 4% 3% 1% 1% 1% 1% 2% 2% 2% 2%
Net Profit 8% 6% 1% 2% 2% 2% 3% 4% 4% 5%
Dividend Amount 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
P.S. In case of companies earning negative FCF, where this model will not work, you must use a normalized positive FCF as
starting number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the his
this business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of
Calculation
by Mohnish Pabrai
Avg 5-Yr Net Profit (Rs Crore) 299.9 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 12.5 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 10,059 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 27,483 Current Market Cap (Rs Crore)
EXPLANATION
Ben Graham's Original Formula: Value = EPS x (8.5 + 2G)
Here, EPS is the trailing 12 month EPS, 8.5 is the P/E ratio of a stock with 0% growth and g is the growth rate for the next 7-10
299.9
8.5
25.0
17,568
27,483
e of around 1962 when Graham was publicizing his works, the risk free interest rate was 4.4% but to adjust to the present, we divide this nu
e present, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
Dicounted Cash Flow Valuation
ABB INDIA LTD
Final Calculations
Terminal Year (1,996)
PV of Year 1-10 Cash Flows (6,140)
Terminal Value (6,426)
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) 27,483
META
Number of shares 21.19
Face Value 2
Current Price 1296.95
Market Capitalization 27483.46
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 2055.01 2507.78 2151.19 2233.34 1923.4 1708.75
Expenses 1936.76 2217.97 1990.3 2086.02 1789.25 1563.16
Other Income 51.36 25.39 31.84 32.58 37.75 106.62
Depreciation 40.54 38.85 37.61 38.32 38.85 27.7
Interest 19.59 30.29 21.18 23.06 15.24 13.56
Profit before tax 109.48 246.06 133.94 118.52 117.81 210.95
Tax 38.91 83.25 43.96 43.46 34.42 39.43
Net profit 70.57 162.81 89.98 75.06 83.39 171.52
Operating Profit 118.25 289.81 160.89 147.32 134.15 145.59
BALANCE SHEET
Report Date Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Equity Share Capital 42.38 42.38 42.38 42.38 42.38 42.38
Reserves 2062.29 2367.35 2381.32 2492.14 2555.67 2635.18
Borrowings 0.02 327.68 620.11
Other Liabilities 3385.46 3207.7 3419.59 3843.34 3654.17 3890.28
Total 5490.15 5617.43 5843.29 6377.86 6579.9 7187.95
Net Block 545.83 673.13 766.08 1168.4 1207.34 1391.51
Capital Work in Progress 137.52 116.34 57.7 74.43 117.01 47.49
Investments 61.12 16.88 16.8 50.7 52.47 16.55
Other Assets 4745.68 4811.08 5002.71 5084.33 5203.08 5732.4
Total 5490.15 5617.43 5843.29 6377.86 6579.9 7187.95
Receivables 2975.89 2857.73 2925.97 3082.51 3264.38 3235.72
Inventory 642.65 729.4 697.85 925.55 920.4 988.85
Cash & Bank 348.23 524.14 587.13 255.88 76.67 316.58
No. of Equity Shares 211908375 211908375 211908375 211908375 211908375 211908375
New Bonus Shares
Face value 2 2 2 2 2 2
CASH FLOW:
Report Date Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Cash from Operating Activity 19.68 354.49 220.68 118.08 -50.22 330.09
Cash from Investing Activity -224.66 -98.58 -99.18 -361.16 -339.76 -209.48
Cash from Financing Activity -89.65 -80 -66.85 -79.94 210.59 119.12
Net Cash Flow -294.63 175.91 54.65 -323.02 -179.39 239.73
DERIVED:
Adjusted Equity Shares in Cr 21.19 21.19 21.19 21.19 21.19 21.19
DO NOT MAKE ANY CHANGES TO THIS SHEET
2 2 2 2
TESTING:
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You can report any formula errors on the worksheet at: screener.feedback@dalal-street.in
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