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Britannia Inds
Britannia Inds
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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 471 499 505 624 737 848 844 950 1,160 1,346
Capital Work in Progress 6 10 13 111 147 107 48 90 30 203
Investments 377 366 389 249 108 198 518 788 487 1,079
Other Assets 653 663 737 883 918 990 1,406 1,702 2,480 2,615
Total 1,507 1,539 1,644 1,867 1,911 2,142 2,816 3,530 4,157 5,243
Debtor Days 8 7 6 8 7 6 6 7 7 11
Inventory Turnover 12 12 13 13 17 16 19 19 14 15
Fixed Asset Turnover 7.3 7.6 9.1 8.8 8.4 8.2 9.3 8.8 7.8 7.4
Debt/Equity 0.4 2.3 1.9 1.5 0.7 0.2 0.1 0.1 0.0 0.1
Return on Equity 20% 36% 41% 49% 47% 50% 55% 39% 33% 29%
Return on Capital Employed 23% 14% 24% 30% 43% 61% 69% 55% 46% 42%
Profit & Loss Account / Income Statement
BRITANNIA INDUSTRIES LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Trailing
Sales 3,421 3,773 4,609 5,485 6,185 6,913 7,858 8,397 9,054 9,914 10,793
% Growth YOY 10% 22% 19% 13% 12% 14% 7% 8% 9%
Expenses 3,209 3,616 4,373 5,175 5,765 6,286 7,008 7,174 7,776 8,412 9,102
Material Cost (% of Sales) 63% 65% 66% 65% 63% 61% 60% 60% 62% 62% Check for wide fluctuations in key
Power and Fuel 2% 1% 1% 1% 1% 2% 1% 1% 1% 1% expense items. For manufacturing
Other Mfr. Exp 8% 7% 7% 7% 8% 7% 7% 6% 6% 5% firms, check their material costs etc. For
Employee Cost 5% 4% 4% 4% 4% 4% 4% 4% 4% 4% services firms, look at employee costs.
Selling and Admin Cost 15% 16% 14% 14% 15% 15% 14% 11% 10% 10%
Operating Profit 212 156 237 311 421 627 850 1,224 1,278 1,502 1,691
Operating Profit Margin 6% 4% 5% 6% 7% 9% 11% 15% 14% 15% 16%
Other Income 83 34 59 59 52 34 248 115 151 166 190
Other Income as % of Sales 2.4% 0.9% 1.3% 1.1% 0.8% 0.5% 3.2% 1.4% 1.7% 1.7% 1.8%
Depreciation 66 58 65 62 73 83 144 113 119 142 157
Interest 33 23 44 42 41 8 4 5 5 8 10
Interest Coverage(Times) 7 6 5 7 10 70 247 252 240 201 169
Profit before tax (PBT) 196 109 187 267 358 569 950 1,220 1,304 1,518 1,714
% Growth YOY -45% 72% 42% 34% 59% 67% 29% 7% 16%
PBT Margin 6% 3% 4% 5% 6% 8% 12% 15% 14% 15% 16%
Tax 53 5 53 67 99 174 261 396 420 514 590
Net profit 143 103 134 200 260 396 688 824 884 1,004 1,124
% Growth YOY -28% 30% 49% 30% 52% 74% 20% 7% 14%
Net Profit Margin 4% 3% 3% 4% 4% 6% 9% 10% 10% 10% 10%
EPS 6.0 4.3 5.6 8.4 10.9 16.5 28.7 34.4 36.8 41.8 46.8
% Growth YOY -28% 30% 49% 30% 52% 74% 20% 7% 13%
Price to earning 25.1 38.0 33.5 34.5 24.8 26.4 38.3 40.1 46.5 62.8 67.0
Price 151 164 188 288 269 435 1,101 1,378 1,712 2,626 3,135
Dividend Payout 63.1% 57.9% 57.8% 50.9% 39.2% 36.4% 27.9% 29.1% 29.8% 29.9%
Market Cap 3,598 3,923 4,494 6,881 6,438 10,433 26,402 33,060 41,086 63,064
Retained Earnings 53 43 57 98 158 252 497 584 620 704
Buffett's $1 Test 19.4
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
BRITANNIA INDUSTRIES LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Total
Cash from Operating Activity (CFO) 250 238 296 246 320 671 584 959 441 1,249 5,256
% Growth YoY -5% 25% -17% 30% 110% -13% 64% -54% 183%
Cash from Investing Activity -6 -37 -118 -65 28 -246 -450 -705 -150 -956 -2,704
Cash from Financing Activity -113 -223 -166 -168 -378 -357 -181 -246 -295 -232 -2,360
Net Cash Flow 132 -22 13 13 -30 69 -47 8 -4 61 192
CFO/Sales 7% 6% 6% 4% 5% 10% 7% 11% 5% 13%
CFO/Net Profit 175% 231% 221% 123% 123% 170% 85% 116% 50% 124%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -65 26 -68 -319 -287 -266 -572 -679 -797 425 -2,600
Average FCF (3 Years) -350
FCF Growth YoY -140% -359% 371% -10% -8% 115% 19% 17% -153%
FCF/Sales -2% 1% -1% -6% -5% -4% -7% -8% -9% 4%
FCF/Net Profit -43% 25% -50% -160% -111% -67% -83% -82% -90% 42%
Operating Margin 6.2% 4.1% 5.1% 5.7% 6.8% 9.1% 10.8% 14.6% 14.1%
PBT Margin 5.7% 2.9% 4.1% 4.9% 5.8% 8.2% 12.1% 14.5% 14.4%
Net Margin 4.2% 2.7% 2.9% 3.6% 4.2% 5.7% 8.8% 9.8% 9.8%
Debtor Days 7.9 7.1 6.4 7.5 7.2 5.7 6.3 7.4 7.2
Inventory Turnover 11.9 12.4 13.3 12.7 16.5 16.4 19.4 19.1 13.7
Fixed Asset Turnover 7.3 7.6 9.1 8.8 8.4 8.2 9.3 8.8 7.8
Debt/Equity 0.4 2.3 1.9 1.5 0.7 0.2 0.1 0.1 0.0
Debt/Assets 18.2% 42.7% 37.6% 32.4% 19.9% 7.0% 5.2% 3.7% 3.0%
Interest Coverage (Times) 7.0 5.6 5.3 7.4 9.7 69.7 247.0 251.6 240.3
Return on Equity 19.9% 36.5% 41.2% 48.8% 46.8% 49.6% 55.3% 39.4% 32.8%
Return on Capital Employed 23.0% 14.0% 24.4% 30.4% 42.7% 60.9% 68.6% 55.1% 46.4%
Free Cash Flow (Rs Cr) -65 26 -68 -319 -287 -266 -572 -679 -797
Mar/18
9.5%
16.4%
13.5%
13.7%
183.0%
###
15.1%
15.3%
10.1%
11.2
15.2
7.4
0.1
3.8%
201.0
29.5%
42.3%
425
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
12,000
Revenue Revenue and Pro
100%
Check for a rising trend. Check for a ris
10,000 80% Compare grow
60%
8,000
40%
6,000 20%
4,000 0%
-20% Jan/10 Jan/12
2,000
-40%
- -60%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Revenue Growth
Net Profit Grow
Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
ROE 20% 36% 41% 49% 47% 50% 55% 39% 33%
ROCE 23% 14% 24% 30% 43% 61% 69% 55% 46%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow 250 238 296 246 320 671 584 959 441
Free Cash Flow -65 26 -68 -319 -287 -266 -572 -679 -797
%
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/09 Jan/11 Jan/13 Jan/15 Jan/17
ROE ROCE
Mar/18
29%
42%
Mar/18
9,914
1,518
1,004
Mar/18
1,249
425
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 63% 65% 66% 65% 63% 61% 60% 60% 62% 62%
Change in Inventory 1% 1% 0% 0% 0% 0% 0% 0% 1% 0%
Power and Fuel 2% 1% 1% 1% 1% 2% 1% 1% 1% 1%
Other Mfr. Exp 8% 7% 7% 7% 8% 7% 7% 6% 6% 5%
Employee Cost 5% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Selling and Admin Cost 15% 16% 14% 14% 15% 15% 14% 11% 10% 10%
Other Expenses 4% 3% 3% 3% 3% 3% 3% 3% 3% 3%
Operating Profit 5% 3% 4% 5% 7% 9% 10% 14% 13% 15%
Other Income 2% 1% 1% 1% 1% 0% 3% 1% 2% 2%
Depreciation 2% 2% 1% 1% 1% 1% 2% 1% 1% 1%
Interest 1% 1% 1% 1% 1% 0% 0% 0% 0% 0%
Profit Before Tax 6% 3% 4% 5% 6% 8% 12% 15% 14% 15%
Tax 2% 0% 1% 1% 2% 3% 3% 5% 5% 5%
Net Profit 4% 3% 3% 4% 4% 6% 9% 10% 10% 10%
Dividend Amount 3% 2% 2% 2% 2% 2% 2% 3% 3% 3%
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) 759.4 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 15.5 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 30,027 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 75,343 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
759.4
8.5
31.0
53,599
75,343
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
BRITANNIA INDUSTRIES LTD
Final Calculations
Terminal Year (1,267)
PV of Year 1-10 Cash Flows (3,896)
Terminal Value (4,078)
Total PV of Cash Flows (7,974)
Current Market Cap (Rs Cr) 75,343
META
Number of shares 24.03
Face Value 1
Current Price 3135.15
Market Capitalization 75343.39
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 2386.97 2281.97 2244.38 2263.7 2545.29 2567.48
Expenses 2048.08 1967.76 1936.29 1935.19 2167.64 2169.1
Other Income 41.19 37.27 33.66 35.35 50.97 36.09
Depreciation 28.93 30.27 32.21 33.19 33.64 32.89
Interest 1.53 1.1 1.32 1.27 1.4 2.55
Profit before tax 349.62 320.11 308.22 329.4 393.58 399.03
Tax 115.57 99.67 97.31 113.28 132.55 135.38
Net profit 233.95 220.49 210.9 215.98 261.05 263.65
Operating Profit 338.89 314.21 308.09 328.51 377.65 398.38
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 23.89 23.89 23.89 23.89 23.91 23.99
Reserves 697.48 258.91 302.14 385.28 531.67 774.12
Borrowings 274.82 656.96 617.93 604.21 380 149.76
Other Liabilities 511.12 599.36 699.72 853.99 974.96 1194.18
Total 1507.31 1539.12 1643.68 1867.37 1910.54 2142.05
Net Block 470.51 499.34 504.89 624.39 736.8 847.59
Capital Work in Progress 6.3 10.16 12.82 111.26 147.3 107.09
Investments 377.34 366.44 388.51 248.51 108.2 197.87
Other Assets 653.16 663.18 737.46 883.21 918.24 989.5
Total 1507.31 1539.12 1643.68 1867.37 1910.54 2142.05
Receivables 74 73.27 80.96 113.01 122.81 108.7
Inventory 288.69 304.21 346.95 431.76 374.67 420.27
Cash & Bank 68.84 42.75 76.88 61.33 102.93 109.07
No. of Equity Shares 23890163 23890163 119450815 119450815 119525815 119925800
New Bonus Shares
Face value 10 10 2 2 2 2
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 250.32 237.74 296.46 246.12 319.8 671.48
Cash from Investing Activity -6.02 -36.68 -117.85 -64.78 28.18 -245.64
Cash from Financing Activity -112.69 -222.89 -165.8 -168.41 -378.15 -357.34
Net Cash Flow 131.61 -21.83 12.81 12.93 -30.17 68.5
DERIVED:
Adjusted Equity Shares in Cr 23.89 23.89 23.89 23.89 23.91 23.99
DO NOT MAKE ANY CHANGES TO THIS SHEET
2 2 2 2
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