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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 1,707 2,123 2,171 2,347 2,703 2,940 3,122 3,343 3,627 3,607
Capital Work in Progress - - - - - - - - - -
Investments 58,818 58,608 70,929 97,483 ### ### ### ### ### ###
Other Assets ### ### ### ### ### ### ### ### ### ###
Total ### ### ### ### ### ### ### ### ### ###
Working Capital ### ### ### ### ### ### ### ### ### ###
Debtors - - - - - - - - - -
Inventory - - - - - - - - - -
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 - - - - - - - - - -
Inventory Turnover - - - - - - - - - -
Fixed Asset Turnover 9.6 7.6 9.2 11.9 13.0 14.0 15.5 18.0 19.1 22.2
Debt/Equity 10.4 8.4 8.8 9.0 9.1 9.4 8.0 8.7 8.0 8.6
Return on Equity 15% 14% 15% 17% 19% 20% 16% 17% 16% 16%
Return on Capital Employed 7% 6% 6% 7% 8% 8% 7% 7% 7% 7%
Profit & Loss Account / Income Statement
HDFC BANK 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 16,332 16,173 19,928 27,874 35,065 41,136 48,470 60,221 69,306 80,241 93,960
% Growth YOY -1% 23% 40% 26% 17% 18% 24% 15% 16%
Expenses 7,233 7,686 8,561 10,613 12,260 12,959 15,407 18,999 22,464 27,712 32,255
Material Cost (% of Sales) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Check for wide fluctuations in key
Power and Fuel 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% expense items. For manufacturing
Other Mfr. Exp 2% 3% 3% 2% 2% 2% 2% 2% 2% 2% firms, check their material costs etc. For
Employee Cost 14% 14% 14% 12% 11% 10% 10% 9% 9% 8% services firms, look at employee costs.
Selling and Admin Cost 8% 8% 8% 6% 6% 5% 5% 5% 5% 4%
Operating Profit 9,100 8,487 11,367 17,262 22,804 28,177 33,063 41,222 46,842 52,530 61,705
Operating Profit Margin 56% 52% 57% 62% 65% 68% 68% 68% 68% 65% 66%
Other Income 3,471 3,983 4,334 5,784 6,852 7,920 8,996 10,752 12,297 15,220 16,983
Other Income as % of Sales 21.3% 24.6% 21.7% 20.7% 19.5% 19.3% 18.6% 17.9% 17.7% 19.0% 18.1%
Depreciation 360 394 497 543 652 672 656 706 833 906 -
Interest 8,911 7,786 9,385 14,990 19,254 22,653 26,074 32,630 36,167 40,146 48,148
Interest Coverage(Times) 1 2 2 2 2 2 2 2 2 2 2
Profit before tax (PBT) 3,299 4,289 5,819 7,513 9,751 12,772 15,329 18,638 22,139 26,697 30,540
% Growth YOY 30% 36% 29% 30% 31% 20% 22% 19% 21%
PBT Margin 20% 27% 29% 27% 28% 31% 32% 31% 32% 33% 33%
Tax 1,054 1,340 1,892 2,346 3,024 4,294 5,113 6,342 7,589 9,211 10,548
Net profit 2,245 2,949 3,926 5,167 6,726 8,478 10,216 12,296 14,550 17,487 19,992
% Growth YOY 31% 33% 32% 30% 26% 20% 20% 18% 20%
Net Profit Margin 14% 18% 20% 19% 19% 21% 21% 20% 21% 22% 21%
EPS 10.6 12.9 16.9 22.0 28.3 35.3 40.8 48.6 56.8 67.4 73.4
% Growth YOY 22% 31% 30% 28% 25% 15% 19% 17% 19%
Price to earning 20.2 30.3 27.9 24.3 23.1 20.6 25.0 22.3 25.9 28.6 29.6
Price 213 390 471 536 653 729 1,021 1,084 1,471 1,929 2,171
Dividend Payout 18.9% 18.6% 19.6% 19.5% 19.5% 19.4% 19.6% 19.5% 19.4% 19.3%
Market Cap 45,374 89,261 109,585 125,788 ### ### ### ### ### ###
Retained Earnings 1,820 2,399 3,159 4,158 5,418 6,835 8,211 9,894 11,731 14,113
Buffett's $1 Test 6.7
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
HDFC BANK 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) -1,736 9,390 -376 ### -1,869 8,364 ### ### 23,585 26,074 342
% Growth YoY -641% -104% 4449% -89% -548% -290% 90% -178% 11%
Cash from Investing Activity 1,500 -553 -1,126 -662 -855 -1,623 -1,933 -627 -1,985 -523 -8,386
Cash from Financing Activity 2,965 3,599 1,228 9,026 9,066 5,563 14,543 33,347 ### 48,411 116,181
Net Cash Flow 2,728 12,436 -274 -8,731 6,342 12,303 -3,252 2,587 10,033 73,963 108,137
CFO/Sales -11% 58% -2% -61% -5% 20% -33% -50% 34% 32%
CFO/Net Profit -77% 318% -10% -331% -28% 99% -155% -245% 162% 149%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -2,051 9,178 -740 ### -2,476 7,427 ### ### 22,347 25,250 -7,514
Average FCF (3 Years) 5,276
FCF Growth YoY -547% -108% 2287% -86% -400% -329% 87% -170% 13%
FCF/Sales -13% 57% -4% -63% -7% 18% -35% -53% 32% 31%
FCF/Net Profit -91% 311% -19% -342% -37% 88% -167% -258% 154% 144%
Operating Margin 55.7% 52.5% 57.0% 61.9% 65.0% 68.5% 68.2% 68.5% 67.6%
PBT Margin 20.2% 26.5% 29.2% 27.0% 27.8% 31.0% 31.6% 30.9% 31.9%
Net Margin 13.7% 18.2% 19.7% 18.5% 19.2% 20.6% 21.1% 20.4% 21.0%
Debtor Days - - - - - - - - -
Inventory Turnover - - - - - - - - -
Fixed Asset Turnover 9.6 7.6 9.2 11.9 13.0 14.0 15.5 18.0 19.1
Debt/Equity 10.4 8.4 8.8 9.0 9.1 9.4 8.0 8.7 8.0
Debt/Assets 82.9% 81.0% 80.4% 80.1% 82.2% 82.7% 84.0% 85.2% 83.1%
Interest Coverage (Times) 1.4 1.6 1.6 1.5 1.5 1.6 1.6 1.6 1.6
Return on Equity 15.3% 13.7% 15.5% 17.3% 18.6% 19.5% 16.5% 16.9% 16.3%
Return on Capital Employed 7.3% 6.0% 6.1% 7.5% 7.9% 7.9% 7.4% 7.3% 7.2%
Free Cash Flow (Rs Cr) -2,051 9,178 -740 ### -2,476 7,427 ### ### ###
Mar/18
15.8%
20.6%
20.2%
19.7%
10.6%
13.0%
65.5%
33.3%
21.8%
-
-
22.2
8.6
85.7%
1.7
16.5%
6.6%
###
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
90,000
Revenue Revenue and Pro
45%
Check for a rising trend. Check for a ris
80,000 40% Compare grow
70,000 35%
60,000 30%
50,000 25%
40,000 20%
15%
30,000
10%
20,000
5%
10,000 0%
- -5% Jan/10 Jan/12
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 15% 14% 15% 17% 19% 20% 16% 17% 16%
ROCE 7% 6% 6% 7% 8% 8% 7% 7% 7%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow -1,736 9,390 -376 -17,095 -1,869 8,364 -15,862 -30,132 23,585
Free Cash Flow -2,051 9,178 -740 -17,660 -2,476 7,427 -17,018 -31,770 22,347
%
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
16%
7%
Mar/18
80,241
26,697
17,487
Mar/18
26,074
25,250
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 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Change in Inventory 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Power and Fuel 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Other Mfr. Exp 2% 3% 3% 2% 2% 2% 2% 2% 2% 2%
Employee Cost 14% 14% 14% 12% 11% 10% 10% 9% 9% 8%
Selling and Admin Cost 8% 8% 8% 6% 6% 5% 5% 5% 5% 4%
Other Expenses 21% 22% 18% 17% 16% 14% 15% 15% 17% 20%
Operating Profit 56% 52% 57% 62% 65% 68% 68% 68% 68% 65%
Other Income 21% 25% 22% 21% 20% 19% 19% 18% 18% 19%
Depreciation 2% 2% 2% 2% 2% 2% 1% 1% 1% 1%
Interest 55% 48% 47% 54% 55% 55% 54% 54% 52% 50%
Profit Before Tax 20% 27% 29% 27% 28% 31% 32% 31% 32% 33%
Tax 6% 8% 9% 8% 9% 10% 11% 11% 11% 11%
Net Profit 14% 18% 20% 19% 19% 21% 21% 20% 21% 22%
Dividend Amount 3% 3% 4% 4% 4% 4% 4% 4% 4% 4%
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) 12,605.4 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 10.5 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 372,566 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 590,935 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
12,605.4
8.5
21.1
637,986
590,935
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
HDFC BANK LTD
Final Calculations
Terminal Year 19,075
PV of Year 1-10 Cash Flows 58,681
Terminal Value 61,416
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) ###
META
Number of shares 272.19
Face Value 2
Current Price 2171
Market Capitalization 590934.86
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 17069.94 17605.6 18114.4 18668.72 19670.28 20581.27
Expenses 5618.98 5558.29 6483.76 6926.22 7016.24 7083.66
Other Income 2900.95 3142.67 3446.26 3516.66 3605.9 3869.17
Depreciation
Interest 9076.35 9296.51 9059.3 9297.98 9918.21 10266.93
Profit before tax 5275.56 5893.47 6017.6 5961.18 6341.73 7099.85
Tax 1820.23 2028.14 2027.51 2067.34 2190.7 2457.25
Net profit 3455.33 3865.33 3990.09 3893.84 4151.03 4642.6
Operating Profit 11450.96 12047.31 11630.64 11742.5 12654.04 13497.61
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 425.38 457.74 465.23 469.34 475.88 479.81
Reserves 14220.95 21061.84 24911.13 29455.04 35738.26 42998.82
Borrowings 151975.22 180320.13 222980.47 270552.95 329253.58 406776.47
Other Liabilities 16737.12 20717.18 29071.95 37494.18 34922.13 41402.97
Total 183358.67 222556.89 277428.78 337971.51 400389.85 491658.07
Net Block 1706.73 2122.81 2170.65 2347.19 2703.08 2939.92
Capital Work in Progress
Investments 58817.55 58607.62 70929.36 97482.91 111613.6 120951.07
Other Assets 122834.39 161826.46 204328.77 238141.41 286073.17 367767.08
Total 183358.67 222556.89 277428.78 337971.51 400389.85 491658.07
Receivables
Inventory
Cash & Bank 17506.62 29942.4 29668.84 20937.73 27280.17 39583.64
No. of Equity Shares 425384109 457743272 465225684 2.347E+09 2.379E+09 2.399E+09
New Bonus Shares
Face value 10 10 10 2 2 2
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity -1736.14 9389.89 -375.83 -17095.45 -1868.78 8363.6
Cash from Investing Activity 1499.76 -553.02 -1125.73 -661.68 -854.62 -1623.11
Cash from Financing Activity 2964.66 3598.91 1227.99 9026.03 9065.84 5562.98
Net Cash Flow 2728.28 12435.78 -273.57 -8731.1 6342.44 12303.47
DERIVED:
Adjusted Equity Shares in Cr 212.69 228.87 232.61 234.67 237.94 239.91
DO NOT MAKE ANY CHANGES TO THIS SHEET
2 2 2 2
TESTING:
This is a testing feature currently.
You can report any formula errors on the worksheet at: screener.feedback@dalal-street.in
… do ANYTHING.
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