Professional Documents
Culture Documents
Safal Niveshak Stock Analysis Excel (Ver. 4.0) : How To Use This Spreadsheet
Safal Niveshak Stock Analysis Excel (Ver. 4.0) : How To Use This Spreadsheet
www.safalniveshak.com
Step 4 - Scroll back to the top of the page, and you will see a button "Export to Excel" on the right side. Click the button and the
the exact format as "Safal Niveshak's Stock Analysis Excel Ver. 4.0". Now onwards, any excel you export for any company on S
Step 5 - Email me your love and testimonial for helping you with this excel. :-)
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.
Working Capital -24 -38 -51 -74 -55 -94 -110 -76 -88 -76
Debtors 10 14 10 8 10 11 11 14 11 13
Inventory 5 3 5 4 5 4 8 11 13 12
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 41 50 30 23 25 25 20 20 13 16
Inventory Turnover 16 30 25 29 30 37 25 24 23 24
Fixed Asset Turnover 2.7 3.4 3.4 2.9 0.9 1.0 1.2 1.6 1.6 1.3
Debt/Equity 0.2 - - - - - - - - -
Return on Equity 31% 35% 31% 24% 22% 18% 21% 21% 20% 18%
Return on Capital Employed 40% 50% 45% 35% 31% 27% 30% 32% 29% 24%
Profit & Loss Account / Income Statement
NESCO 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 85 102 116 128 143 161 194 261 306 304 340
% Growth YOY 20% 14% 10% 12% 12% 21% 34% 17% -1%
Expenses 46 38 42 38 43 53 56 73 92 88 123
Material Cost (% of Sales) 19% 9% 10% 9% 8% 5% 6% 5% 5% 4% Check for wide fluctuations in key
Power and Fuel 3% 2% 2% 1% 3% 2% 2% 4% 4% 4% expense items. For manufacturing
Other Mfr. Exp 8% 7% 7% 6% 5% 6% 3% 5% 7% 6% firms, check their material costs etc. For
Employee Cost 5% 4% 4% 5% 5% 4% 4% 3% 4% 5% services firms, look at employee costs.
Selling and Admin Cost 12% 11% 11% 7% 5% 13% 13% 9% 9% 9%
Operating Profit 40 64 74 90 101 108 138 189 214 216 216
Operating Profit Margin 47% 62% 64% 70% 70% 67% 71% 72% 70% 71% 64%
Other Income 11 18 28 11 19 20 28 33 43 36 27
Other Income as % of Sales 13.0% 17.7% 24.4% 9.0% 13.5% 12.6% 14.5% 12.5% 14.1% 11.9% 8.0%
Depreciation 2 2 2 3 6 11 7 7 8 11 12
Interest 2 1 1 1 1 0 0 4 5 6 5
Interest Coverage(Times) 25 53 162 72 159 1,064 1,230 54 49 43 48
Profit before tax (PBT) 47 78 100 97 114 117 160 211 244 235 226
% Growth YOY 67% 29% -3% 17% 3% 37% 32% 16% -4%
PBT Margin 55% 76% 86% 76% 79% 73% 82% 81% 80% 77% 67%
Tax 14 23 31 29 32 36 48 67 74 58 56
Net profit 33 55 69 67 82 81 112 144 169 177 170
% Growth YOY 68% 25% -2% 21% -1% 38% 29% 18% 4%
Net Profit Margin 39% 54% 59% 53% 57% 50% 57% 55% 55% 58% 50%
EPS 7.8 13.0 9.7 9.6 11.6 11.5 15.8 20.5 24.0 25.1 24.2
% Growth YOY 68% -25% -2% 21% -1% 38% 29% 18% 4%
Price to earning 7.4 8.6 10.3 13.8 13.4 14.9 20.6 14.9 20.8 22.4 19.7
Price 57 111 101 132 155 172 327 305 499 563 477
Dividend Payout 2.6% 1.9% 5.1% 6.3% 6.0% 8.7% 8.2% 8.3% 9.1% 9.2%
Market Cap 243 470 709 927 1,093 1,209 2,302 2,146 3,516 3,965
Retained Earnings 32 54 65 63 77 74 102 132 154 160
Buffett's $1 Test 4.1
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
NESCO 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) 0 43 78 73 55 117 103 137 152 143 902
% Growth YoY 10250% 80% -7% -24% 112% -12% 33% 11% -6%
Cash from Investing Activity -15 -37 -70 -78 -51 -107 -91 -110 -153 -123 -836
Cash from Financing Activity 17 -17 - - -6 -8 -11 -25 -0 -19 -70
Net Cash Flow 2 -10 8 -6 -2 2 0 1 -1 2 -4
CFO/Sales 0% 43% 67% 57% 39% 73% 53% 52% 50% 47%
CFO/Net Profit 1% 79% 114% 108% 68% 145% 92% 95% 90% 81%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -315 -168 -286 -492 -552 -820 -1,053 -1,501 -1,086 -681 -6,954
Average FCF (3 Years) -1,089
FCF Growth YoY -47% 70% 72% 12% 49% 28% 43% -28% -37%
FCF/Sales -370% -165% -246% -385% -385% -509% -542% -575% -355% -224%
FCF/Net Profit -959% -306% -416% -731% -675% -1012% -944% -1042% -641% -385%
Operating Margin 46.5% 62.4% 64.0% 70.4% 70.3% 66.9% 71.1% 72.2% 70.0%
PBT Margin 54.7% 76.4% 86.0% 75.7% 79.2% 72.5% 82.2% 80.7% 79.7%
Net Margin 38.5% 54.0% 59.0% 52.6% 56.9% 50.3% 57.4% 55.2% 55.4%
Debtor Days 40.9 50.3 29.8 23.2 24.6 25.3 20.1 20.1 13.3
Inventory Turnover 16.4 29.9 25.1 29.0 29.6 36.6 25.3 23.8 23.0
Fixed Asset Turnover 2.7 3.4 3.4 2.9 0.9 1.0 1.2 1.6 1.6
Debt/Equity 0.2 - - - - - - - -
Debt/Assets 7.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Interest Coverage (Times) 24.5 53.2 162.3 71.7 158.9 ### ### 54.2 49.5
Return on Equity 31.5% 34.8% 31.0% 23.7% 22.3% 18.5% 20.9% 21.4% 20.1%
Return on Capital Employed 40.1% 50.2% 45.5% 34.6% 31.3% 26.7% 30.0% 31.8% 29.5%
Free Cash Flow (Rs Cr) -315 -168 -286 -492 -552 -820 -1,053 -1,501 -1,086
Mar/18
-0.7%
-3.5%
4.3%
4.5%
-5.6%
-37.3%
71.0%
77.4%
58.2%
16.2
24.5
1.3
-
0.0%
43.4
17.5%
23.9%
-681
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
350
Revenue Revenue and Pro
80%
Check for a rising trend. Check for a ris
300 70% Compare grow
60%
250
50%
200 40%
150 30%
100 20%
10%
50
0%
- -10% 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 31% 35% 31% 24% 22% 18% 21% 21% 20%
ROCE 40% 50% 45% 35% 31% 27% 30% 32% 29%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow 0 43 78 73 55 117 103 137 152
Free Cash Flow -315 -168 -286 -492 -552 -820 -1,053 -1,501 -1,086
%
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
18%
24%
Mar/18
304
235
177
Mar/18
143
-681
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 19% 9% 10% 9% 8% 5% 6% 5% 5% 4%
Change in Inventory 0% -2% 1% -1% 1% 0% 1% 1% 0% 0%
Power and Fuel 3% 2% 2% 1% 3% 2% 2% 4% 4% 4%
Other Mfr. Exp 8% 7% 7% 6% 5% 6% 3% 5% 7% 6%
Employee Cost 5% 4% 4% 5% 5% 4% 4% 3% 4% 5%
Selling and Admin Cost 12% 11% 11% 7% 5% 13% 13% 9% 9% 9%
Other Expenses 7% 4% 2% 2% 4% 3% 2% 2% 1% 2%
Operating Profit 46% 66% 63% 72% 69% 67% 69% 71% 70% 70%
Other Income 13% 18% 24% 9% 13% 13% 15% 12% 14% 12%
Depreciation 2% 2% 2% 3% 4% 7% 3% 3% 3% 4%
Interest 2% 1% 1% 1% 1% 0% 0% 2% 2% 2%
Profit Before Tax 55% 76% 86% 76% 79% 73% 82% 81% 80% 77%
Tax 16% 22% 27% 23% 22% 22% 25% 25% 24% 19%
Net Profit 39% 54% 59% 53% 57% 50% 57% 55% 55% 58%
Dividend Amount 1% 1% 3% 3% 3% 4% 5% 5% 5% 5%
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
NESCO LTD
Dhandho IV - Higher Range
FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth
Excess Cash (Latest) 5,829 Year 1-3 20%
(1,307) (1,167) Year 4-6 15%
(1,569) (1,251) Year 7-10 10%
(1,882) (1,340) Discount Rate 12%
(2,165) (1,376)
(2,490) (1,413)
(2,863) (1,450)
(3,149) (1,425)
(3,464) (1,399)
(3,811) (1,374)
(4,192) (1,350)
(62,875) (20,244)
Intrinsic Value (27,960)
Current Mkt. Cap. 3,360
Premium/(Discount) to IV -112%
Avg 5-Yr Net Profit (Rs Crore) 136.6 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 8.3 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 3,439 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 3,360 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
136.6
8.5
16.7
5,718
3,360
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
NESCO LTD
Final Calculations
Terminal Year (3,939)
PV of Year 1-10 Cash Flows ###
Terminal Value ###
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) 3,360
META
Number of shares 7.05
Face Value 2
Current Price 476.8
Market Capitalization 3359.54
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 76.89 90.43 77.64 64.93 82.56 80.62
Expenses 15.59 24.59 35.89 19.71 23.64 22.1
Other Income 14.39 7.91 11.27 12.35 10.01 7.72
Depreciation 1.85 2.02 2.48 2.37 2.71 2.94
Interest 2 1.02 1.98 1.25 1.25 1.55
Profit before tax 71.84 70.71 48.56 53.95 64.97 61.75
Tax 24.23 14.53 14.08 12.26 16.58 17.92
Net profit 47.6 56.19 34.48 41.69 48.39 43.83
Operating Profit 61.3 65.84 41.75 45.22 58.92 58.52
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 7.05 7.05 14.09 14.09 14.09 14.09
Reserves 97.2 150.95 207.19 269.59 351.93 424.68
Borrowings 16.82
Other Liabilities 112.04 133.37 92.37 97.38 81.13 121.87
Total 233.11 291.37 313.65 381.06 447.15 560.64
Net Block 31.89 29.62 34.19 43.94 158.42 159.81
Capital Work in Progress 2.86 33.08 79.1 103.73 4.03 4.75
Investments 110.56 133.69 158.58 210.16 258.44 368.43
Other Assets 87.8 94.98 41.78 23.23 26.26 27.65
Total 233.11 291.37 313.65 381.06 447.15 560.64
Receivables 9.53 14.03 9.51 8.13 9.66 11.18
Inventory 5.2 3.41 4.63 4.41 4.84 4.4
Cash & Bank 12.64 2.2 10.16 4.25 2.14 4.35
No. of Equity Shares 7046186 7046186 14091992 14091992 14091992 14091992
New Bonus Shares 7045996
Face value 10 10 10 10 10 10
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 0.42 43.47 78.41 72.56 55.36 117.14
Cash from Investing Activity -14.9 -37.08 -70.45 -78.47 -50.98 -106.58
Cash from Financing Activity 16.83 -16.82 -6.49 -8.35
Net Cash Flow 2.35 -10.43 7.96 -5.91 -2.11 2.21
DERIVED:
Adjusted Equity Shares in Cr 4.23 4.23 7.05 7.05 7.05 7.05
DO NOT MAKE ANY CHANGES TO THIS SHEET
10 10 10 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.
dalal-street.in