Safal Niveshak Stock Analysis Excel (Ver.

3
www.safalniveshak.com

HOW TO USE THIS SPREADSHEET

Step 1 - This spreadsheet works only on Screener.in. The first step is to create a free account here - https://www.screener.in/r
Step 2 - After creating your account, while you are logged in to Screener.in website, visit this page - https://www.screener.in/e
Step 3 - Visit the home page of Screener.in and choose a company of your choice. Once you do that, you will see details of you
financial statement table called "Quarterly Results" and click on "View Consolidated". Now, all data you see for this company w
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. 3.0". 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"
which you must update manually from the company's annual reports. Don’t forget to make these changes as these numbers are
3. You may update the sheet and add your own analysis, formulae etc. and then upload again to Screener.in site using the Ste
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 (
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.

Note: All data is sourced from Screener.in

 Safal Niveshak Stock
Analysis Excel (Ver. 3.0)
www.safalniveshak.com
Basic Company Details
Parameters
Company
Current Stock Price (Rs)
Face Value (Rs)
No. of Shares (Crore)
Market Capitalization (Rs Crore)
Key Financials - Trend
Parameters
Sales Growth (9-Year CAGR)
Profit Before Tax Growth (9-Year CAGR)
Net Profit Growth (8-Year CAGR)
Average Debt/Equity (5-Years, x)
Average Return on Equity (5-Years)
Average P/E (5-Years, x)
Latest P/E (x)
Warning! Excel can be a wond
the past. But it can be a weapon
to predict the future! So be ver
are getting into. Here, garbage
garbage ou
Details
NATIONAL ALUMINIUM COMPANY LTD
43 Remember! Focus on decisions
5.0 for disconfirming evidence
186.6
8,059
Please! It's your money. Pleas
Details
results of this excel cause yo
9.6% designed this excel to aid your
10.1% alone are responsible for your
8.8% peacefully ever after! I am not
0.0 you to do the hard work by ana
10.4% your own. But I'd rather give yo
of a map, for you can confuse m
11.9
lose it all. All the
 Warning! Excel can be a wonderful tool to analyze
the past. But it can be a weapon of mass destruction
to predict the future! So be very careful of what you
are getting into. Here, garbage in will always equal
garbage out.

Remember! Focus on decisions, not outcomes. Look

for disconfirming evidence. Calculate. Pray!

Please! It's your money. Please don't blame me if

results of this excel cause you to lose it all! I've
designed this excel to aid your own thinking, but you
alone are responsible for your actions. I want to live
peacefully ever after! I am not a sadist who wants
you to do the hard work by analyzing companies on
your own. But I'd rather give you a compass instead
of a map, for you can confuse map with territory and
lose it all. All the best!
 Buffett Checklist - Read, Remember, Follow!
Source - Buffettology by Mary Buffett & David Clark
Parameter

Consumer monopoly or commodity?

Understand how business works

Is the company conservatively financed?

Are earnings strong and do they show an

upward trend?

Does the company stick with what it

knows?

Has the company been buying back its

shares?

Have retained earnings been invested

well?

Is the company’s return on equity above

average?

Is the company free to adjust prices to

inflation?
Does the company need to constantly
reinvest in capital?

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.

Focus on decisions, not outcomes. Look for disconfirming evidence.

 Balance Sheet
NATIONAL ALUMINIUM COMPANY LTD
Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Equity Share Capital 644 1,289 1,289 1,289 1,289 1,289 1,289 966 966 933
Reserves 9,751 9,876 10,426 10,644 10,834 11,509 11,906 9,239 9,538 9,552
Borrowings 9 15 - - - - - 51 45 67
Other Liabilities 2,996 3,938 3,994 4,618 4,681 3,550 3,752 4,505 4,417 5,028
Total 13,400 15,117 15,709 16,551 16,804 16,347 16,947 14,762 14,967 15,579

Net Block 4,836 5,494 6,612 6,629 6,792 6,645 6,596 7,144 7,139 7,286
Capital Work in Progress 2,243 1,707 684 1,002 769 550 688 566 915 883
Investments 987 1,332 754 1,490 1,245 951 1,010 1,261 711 257
Other Assets 5,333 6,585 7,658 7,430 7,998 8,201 8,653 5,791 6,202 7,154
Total 13,400 15,117 15,709 16,551 16,804 16,347 16,947 14,762 14,967 15,579

Working Capital 2,338 2,647 3,664 2,812 3,317 4,651 4,901 1,286 1,785 2,126
Debtors 182 112 138 149 244 121 235 184 258 241
Inventory 945 1,071 1,196 1,381 1,174 1,166 1,055 1,156 1,194 1,210
Cash & Bank** 4,735 3,367 3,190 3,393 2,605 3,546 4,618
** 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 13 7 8 8 13 6 13 9 10 8
Inventory Turnover 5 6 6 5 6 6 6 7 8 10
Fixed Asset Turnover 1.0 1.1 1.0 1.0 1.0 1.1 1.0 1.1 1.3 1.6
Debt/Equity 0.0 0.0 - - - - - 0.0 0.0 0.0
Return on Equity 8% 10% 7% 5% 5% 10% 6% 7% 13% 17%
Return on Capital Employed 6% 10% 3% 3% 3% 6% 1% 4% 2% 15%
 Vishal: This
number shows
how much wealth
the business has
created for
Vishal: Check for
shareholders
sales growth. If a
(excluding
business is not
Profit & Loss Account / Income Statement
dividends) for
growing for a few
every Rupee it has
years, or growing
retained over NATIONAL ALUMINIUM COMPANY LTD
Rs Cr slower than
Mar-10 the
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Trailing
years.
industry and
Sales 5,056 6,057 6,612 6,916 6,781 7,383 6,818 7,543 9,509 11,499 10,610
peers, you may
% Growth YOY This idea is from
give it a pass. 20% 9% 5% -2% 9% -8% 11% 26% 21%
Expenses Warren
3,977 Buffett 4,364 5,475 5,841 5,693 5,510 5,858 6,463 8,158 8,607 8,514
who wrote this in
Material Cost (% of Sales) 15% 13% 16% 17% 16% 14% 16% 16% 15% ### Check for wide fluctuations in key
his 1984 letter –
Power and Fuel “For32% a number29% of 34% 36% 30% 25% 28% 30% 29% 26% expense items. For manufacturing firms,
Other Mfr. Exp 9% managers
reasons 10% 10% 10% 11% 10% 11% 9% 9% 8% check their material costs etc. For
Employee Cost like17%
to withhold16% 16% 17% 18% 19% 21% 20% 24% 18% services firms, look at employee costs.
Selling and Admin Cost unrestricted
5% readily
5% 5% 6% 6% 6% 7% 7% 5% 5%
Check this
Vishal: Important
distributable
Operating Profit 1,079 especially
number
profitability 1,693 1,136 1,075 1,087 1,873 960 1,080 1,351 2,893 2,096
earnings from
Operating Profit Margin for21%
firms Better
number.
shareholders 28%
with –debt.to 17% 16% 16% 25% 14% 14% 14% 25% 20%
Other Income It shows
than 480
expand the safety
Operating
the 353 660 511 558 821 658 368 1,170 326 234
Other Income as % of Sales of interest
Margin.
corporate Check
9.5% empire out
5.8% 10.0% 7.4% 8.2% 11.1% 9.6% 4.9% 12.3% 2.8% 2.2%
Depreciation payments,
changes
over 319which in and
the422 467 505 525 414 426 480 480 476 481
whether
same the firmto
Interest 85over
managers
Vishal:
years,
rule,
Suggests 101 132 176 203 167 3 3 2 2 3
has enough
and explore
operate from profits
a
Interest Coverage(Times) the
to 15the the 16
attractiveness
pay 10 6 6 14 365 360 1,047 1,152 538
reasons
position of same.
for
Profit before tax (PBT) of a firmBetter
1,155
same.
Vishal:
exceptional in the
1,524 1,198 905 918 2,113 1,189 965 2,039 2,740 1,846
% Growth YOY eyes of number
Mr.
Falling/rising
growth
financial comfort, 32%
PBT -21% -24% 1% 130% -44% -19% 111% 34%
PBT Margin Market.
margin
than
etc. But
23% Lower
Netmay
weprofit
believe
25% 18% 13% 14% 29% 17% 13% 21% 24% 17%
P/Es
indicate
growth,
there reflect lower
because
Tax 341is only
attractivenss,
one455
and
348 312 275 792 402 296 696 1,008 703
narrowing/expandi
EPS
valid isreason
adjusted for for
Net profit 814reflect1,069
higher 850 593 642 1,322 787 669 1,342 1,732 1,143
ng moat.
any dilution etc.
retention.
% Growth YOY Seek gradual 31%
higher
Unrestricted -21% -30% 8% 106% -40% -15% 101% 29%
Net Profit Margin attractiveness.
16%inshould
growth
earnings this 18% be 13% 9% 9% 18% 12% 9% 14% 15% 11%
EPS However,
3.2 only
number,
retained andP/Esbe in
4.1
when 3.3 2.3 2.5 5.1 3.1 3.5 6.9 9.3 6.1
isolation
carefulisof
there atell
a 31%
% Growth YOY -21% -30% 8% 106% -40% 13% 101% 34%
nothing about
declining
reasonable number. the
Price to earning 32.3 of the 23.0
quality 16.5 14.4 15.9 9.1 12.9 22.1 9.6 6.0 7.1
prospect – backed
Price 102
business, 96 54 33 40 47 40 77 66 55 43
preferably by
Dividend Payout especially
19.8% evidence
historical when
36.2% 30.3% 54.3% 60.2% 34.1% 65.5% 81.0% 82.1% 61.9%
Market Cap you
26,254are
or, when looking
24,638 at 14,033 8,544 10,245 12,023 10,180 14,787 12,844 10,345
Retained Earnings short653 term by683
appropriate, a 592 271 256 871 272 127 241 660
numbers.
thoughtful analysis
Buffett's $1 Test -3.4
of the future – that
for every dollar
retained by the
TRENDS: 10 YEARS 7 YEARS
corporation, at 5 YEARS 3 YEARS
Sales Growth 9.6%
least 8.2%
one dollar of 11.1% 19.0%
PBT Growth market
10.1%value12.5%
will 24.5% 32.1%
PBT Margin be created
19.7% for
18.7% 20.8% 19.4%
Price to Earning owners.
16.2 This will
12.9 11.9 12.6
happen only if the
capital retained
Check for long term vs short term trends here. Check if the growth over
past 3 or 5 years has slowed down /produces
improved compared to long term (7 to
incremental
10 years) growth numbers.
earnings equal to,
or above, those
generally available
to investors.”

Formula is -
Change in
Market Cap
over, say, 10
years Divided By
Total Retained
Earnings during
the same period

Here, Retained
Earnings = Net
Profit minus
Dividend paid

Bigger the
number, more
wealth has been
created by the
business for every
Rupee retained,
which is good.
 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 15% 13% 16% 17% 16% 14% 16% 16% 15% 17%
Change in Inventory 0% 1% 0% 1% -1% 0% 0% 1% 0% 0%
Power and Fuel 32% 29% 34% 36% 30% 25% 28% 30% 29% 26%
Other Mfr. Exp 9% 10% 10% 10% 11% 10% 11% 9% 9% 8%
Employee Cost 17% 16% 16% 17% 18% 19% 21% 20% 24% 18%
Selling and Admin Cost 5% 5% 5% 6% 6% 6% 7% 7% 5% 5%
Other Expenses 1% 0% 2% 1% 2% 1% 5% 5% 3% 2%
Operating Profit 22% 26% 17% 14% 18% 25% 14% 12% 15% 25%
Other Income 10% 6% 10% 7% 8% 11% 10% 5% 12% 3%
Depreciation 6% 7% 7% 7% 8% 6% 6% 6% 5% 4%
Interest 2% 2% 2% 3% 3% 2% 0% ### 0% 0%
Profit Before Tax 23% 25% 18% 13% 14% 29% 17% 13% 21% 24%
Tax 7% 8% 5% 5% 4% 11% 6% 4% 7% 9%
Net Profit 16% 18% 13% 9% 9% 18% 12% 9% 14% 15%
Dividend Amount 3% 6% 4% 5% 6% 6% 8% 7% 12% 9%

Common Size Balance Sheet

Rs Cr Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Equity Share Capital 5% 9% 8% 8% 8% 8% 8% 7% 6% 6%
Reserves 73% 65% 66% 64% 64% 70% 70% 63% 64% 61%
Borrowings 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Other Liabilities 22% 26% 25% 28% 28% 22% 22% 31% 30% 32%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 36% 36% 42% 40% 40% 41% 39% 48% 48% 47%
Capital Work in Progress 17% 11% 4% 6% 5% 3% 4% 4% 6% 6%
Investments 7% 9% 5% 9% 7% 6% 6% 9% 5% 2%
Other Assets 40% 44% 49% 45% 48% 50% 51% 39% 41% 46%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 1% 1% 1% 1% 1% 1% 1% 1% 2% 2%
Inventory 7% 7% 8% 8% 7% 7% 6% 8% 8% 8%
Cash & Bank 24% 25% 27% 21% 24% 28% 30% 15% 19% 22%
 A common-size financial statement is displays line
items as a percentage of one selected or common
figure. Creating common-size financial statements
makes it easier to analyze a company over time and
compare it with its peers. Using common-size
financial statements helps investors spot trends that a
raw financial statement may not uncover.
 Cash Flow Statement
NATIONAL ALUMINIUM COMPANY LTD
Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Total
Cash from Operating Activity (CFO) 1,172 1,630 887 441 981 520 881 1,436 1,590 2,409 11,948
Cash from Investing Activity -593 -768 -82 -877 78 566 314 1,550 -490 -532 -835
Cash from Financing Activity -295 -219 -431 -229 -515 -507 -544 -3,616 -1,100 -1,731 -9,186
Net Cash Flow 283 643 373 -664 544 580 651 -630 1 146 1,927
CFO/Sales 23% 27% 13% 6% 14% 7% 13% 19% 17% 21%
CFO/Net Profit 144% 152% 104% 74% 153% 39% 112% 215% 118% 139%
Capex** 375 315 212 364 565 607 937 1156 1638 1238
FCF 797 1,315 675 77 416 -87 -56 280 -48 1,171 4,541
Average FCF (3 Years) 468
FCF/Sales 16% 22% 10% 1% 6% -1% -1% 4% -1% 10%
FCF/Net Profit 98% 123% 79% 13% 65% -7% -7% 42% -4% 68%

** Manually enter this number;

Convert to Rs Crore if not already
done in the Annual Reports; Use
"Capital expenditure" number
shown under "Cash Flow from
Investing Activities" segment of
Consolidated Cash Flow Statement
available in the Annual Reports
 Earnings Power Value (Bruce Greenwald)
Read the book - Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald (EPV is explained
Explanation - Earnings power value (EPV) is a technique for valuing stocks by making an assumption about the sustainability
capital but assuming no further growth. EPV formula = Adjusted Earnings / Cost of Capital

Company Name NATIONAL ALUMINIUM COMPANY

Latest Year Ended Mar-19

Calculation of Normalized Earnings

(Rs Crore) Mar/15
Vishal:Mar/16
If the Mar/17 Mar/18 Mar/19
Sales 7,383 6,818
Maintenance 7,543 9,509 11,499
EBIT Capex
2,280 number
1,192 is 967 2,041 2,742
Less - Adjustment negative,
11 given
6 5 10 14
EBIT (Adjusted) that the formula
2,269 1,186 963 2,031 2,729
based Growth
EBIT Margin'(Adjusted) 31% 17% 13% 21% 24%
capex number (as
Tax Rate 37% 34%
calculated in the 31% 34% 37%
Earnings After Tax (Adjusted) 1,419 785
table below) may 667 1,337 1,725
Depreciation 414
be 426
bigger than 480 480 476
Total Capex,
Maintenance Capex (See Table Below) -77,188 73,975 use ### ### ###
Earnings After Tax (Normalized, A) Total Capex###
79,020 as 93,736 ### ###
Maintenance
Reported Profit After Tax (B) 1,322 787 669 1,342 1,732
Capex in this row.

EPV Process (as per Greenwald's book, slightly modified) -

1. Start with operating earnings, i.e. EBIT. Adjust any one-time charges. I deduct 0.5% of reported EBIT as this adjustment
2. Apply a tax rate to the adjusted EBIT. I use the actual tax rate calculated from the Income Statement. After reducing this tax,
3. Add back Depreciation
4. Subtract Maintenance Capex
5. After these four steps, you arrive at Normalized Earnings
6. Divide this Normalized Earnings number by the Discount Rate to arrive at EPV. I use 12% discount rate/cost of capital.
7. Note that Greenwald's process as per his book is slightly more detailed than what I have used here

Calculation of Maintenance Capex

(Rs Crore) Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
Fixed Assets (PPE) 6,645 6,596 7,144 7,139 7,286
Net Sales 7,383 6,818 7,543 9,509 11,499
PPE/Sales 0.90 0.97 0.95 0.75 0.63
Change in Sales 602 -565 725 1,966 1,990
Total Capex 607 937 1,156 1,638 1,238
Growth Capex 77,795 ### 93,745 ### ###
Maintenance Capex -77,188 73,975 ### ### ###

Calculating Maintenance Capex, as per Greenwald's book -

1. Calculate the Average Gross Property Plant and Equipment (PPE) / Sales ratio over 5-7 years
2. Calculate current year’s increase in sales
3. Multiply PPE/Sales ratio by increase in sales to arrive at Growth Capex
4. Maintenance Capex = Total Capex figure from the cash flow statement minus Growth Capex calculated above
(Bruce Greenwald)
nd by Bruce Greenwald (EPV is explained Page 93 onwards)
ng an assumption about the sustainability of current earnings and the cost of
mula = Adjusted Earnings / Cost of Capital

Vishal: A number
less/more than
100% means that
EPV with Different Cost of Capital the Intrinsic Value
Discount Rate EPV Net Cash** Total EPV Peras
Share
per EPV
10% ### 4,551 ### calculation is
13,860
12% ### 4,551 ### less/more than the
11,554
15% ### 4,551 ### current
9,248 market
cap, which makes
Current Market Cap (Rs Crore) 8,059
the stock
EPV as % of Market Cap 26746% overpriced/underpr
iced to that extent.
** Change the "Cash & Bank" number in "Balance Sheet" sheet
(Row #19) so that the correct number automatically reflects here

% of reported EBIT as this adjustment

Income Statement. After reducing this tax, we arrive at Adjusted Earnings After Tax

se 12% discount rate/cost of capital.

I have used here

er 5-7 years

wth Capex calculated above

 Vishal: This is the
latest "Cash and
Dhandho Intrinsic Value Calculation
Bank" number that
Read the book - The Dhandho Investor by Mohnish Pabrai
is updated
automatically in
NATIONAL ALUMINIUM COMPANY LTD this sheet from the NATIONAL ALUMINIUM COMPAN
Dhandho IV - Lower Range "Cash Flow Sheet". Dhandho IV - Higher Range
This cash number
Year FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth Year
is added to arrive
0 Excess Cash (Latest) 4,618 Yearat1-3
the Intrinsic 15% 0 Excess Cash (Latest)
1 FY18 538 480 YearValue.
4-6 10% 1 FY18
2 FY19 619 493 Year 7-10 5% 2 FY19
3 FY20 711 506 Discount Rate 12% 3 FY20
4 FY21 782 Vishal: This497is the 4 FY21
5 FY22 861 price at which488the Last 5-Years' CAGR 5 FY22
6 FY23 947 business is sold
480atSales 11% 6 FY23
the end of the
7 FY24 994 450 PBT 24% 7 FY24
10th year. This
8 FY25 1,044 422
price is calculated FCF 23% 8 FY25
9 FY26 1,096 395
using a multiple - 9 FY26
10 FY27 1,151 371- to
like 10x or 15x 10 FY27
10 11,508 10th year's3,705 10
Intrinsic Value calculated12,905
FCF. Intrinsic Value
Current Mkt. Cap. 8,059 Current Mkt. Cap.
Premium/(Discount) to IV -38% Premium/(Discount) to IV

Note: See explanation of this model here

P.S. In case of companies earning negative FCF, where this model will not work, you must use a normalized positive FCF as th
number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the history
business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of r
Calculation
by Mohnish Pabrai

NATIONAL ALUMINIUM COMPANY LTD

Dhandho IV - Higher Range
FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth
Excess Cash (Latest) 4,618 Year 1-3 20%
561 501 Year 4-6 15%
673 537 Year 7-10 10%
808 575 Discount Rate 12%
929 591
1,069 606
1,229 623
1,352 612
1,487 601
1,636 590
1,800 579
26,994 8,691
Intrinsic Value 19,124
Current Mkt. Cap. 8,059
Premium/(Discount) to IV -58%

use a normalized positive FCF as the starting

, without capex. Check the history of this
ng the model to fit your version of reality.
 Vishal: Instead of
trailing 12-months
EPS as Graham
Vishal:
proposed, Instead
I haveof
assumed EPS
Ben Graham Formula (Low Range) Ben Graham Formula (High Range
used the average
growth
Net Profit rateof of
last
next 7-10 years
five years. The as
Company Name LUMINIUM COMPANY LTD reason ICompany
Graham have usedName
proposed,
Year Ended Mar/19 INet
have assumed
Year Ended
Profit instead
50% of last five
of EPS is so that I
Avg 5-Yr Net Profit (Rs Crore) 1,170.5 years
arrive CAGR
atAvg in netNet Profit (Rs Crore)
Intrinsic
5-Yr
profit
value in(toterms
arriveofat
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
the lower
market caplevel
andof
Long-Term Growth Rate 11.0 the Long-Term
Value Growth Rate
not Intrinsic
stock price.
range)
Ben Graham Value (Rs Crore) 35,638 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 8,059 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

Ben Graham's Revised Formula: Value = [EPS x (8.5 + 2G) x 4.4] / Y

Here, 4.4 is what Graham determined to be his minimum required rate of return. At the time of around 1962 when Graham was

Note: I have used Graham's original formula in the above calculations

 Vishal: Instead of
assumed EPS
m Formula (High Range) growth rate of
next 7-10 years as
LUMINIUM COMPANY LTD Graham proposed,
Mar/19 I have assumed
100% of last five
1,170.5 years CAGR in net
profit (to arrive at
8.5
the upper level of
21.9 the Intrinsic Value
range)
61,328
8,059

is the growth rate for the next 7-10 years

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 num
resent, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
 company looks to
investment
calculated
be undervalued in its
from
discount
the Cash
with 0% rate. Flow In
growth
other
Statement
rate, you words, in ifthe
have a
stock
annual is
more upside a "riskier"
report. than
Safal
Safal Niveshak:
Niveshak:
investment
downside. than
The
In
Sincea 2-stage
it isn’t DCF,
another,
FCF formula adjust = for
Dicounted Cash Flow Valuation
higher
we break
practical
some
Net
you
risk
Cash tothe
in
setnext
the
the
growth
10 yearsrate, into the
two
forecast
NATIONAL
cash cash flows
ALUMINIUM COMPANY LTD
higherflow
from/(used
Safal
phases
growth
Niveshak:
you
of setin)
five up
for an
estimates
Operating infiniteandis
If
the this
years figure
downside
each, and
number
some
Activitiesin ofthe years,
minus
Initial Cash Flow (Rs Cr) negative,
potential.
468
thenusualcalculatei.e.,
Just in
be
the 10,647
it’s
discount
Purchase to
rate. end
brackets,
reasonable
FCF growth itofmeans
and
based 8,059
the
Fixed DCF with a
that
use
on theAssets
common
growth company
rates
Years terminal
1-5
Ignore value.yet
6-10
simple 132%
has
sense.
assumedmore Cash
below.
FCF Growth Rate junk
15%
In models
case 12%
of
than Debt. This is like
The
CAPM best
companies to getterminal
the
Discount Rate automatically
On most
12% of earning
the
growth
discount
negative rate
rate.
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Terminal Growth Rate added
stocks
2% to
I the
value, PVI of
and
People
where thethis
inhighest
themodel
cash
rarelyflowsgo below
above
you
finance
will should
not world go pour(for
to
15% give(forawork,
complete
the first you
Net Debt Level (Rs Cr) safest
(4,551)
out
musttheir businesses)
picture
5-year useofhearts
athe to
period),
is 2%. the most
obtain
normalized positive
company's
and that’s only for
Year accurate
FCF asGrowth
valuation.
the safest,
FCF thediscount
starting
cash- Present Value
rate
number. by analyzing
generating This
1 538 15% 480
risk
number free isrates,
businesses. your
This is
2 619
beta,
assumption 15%
risk2xpremiumof FCF 493
approx. India's
3 711
and
the WACC.
business
expected
15%
long-It's
will 506
4 818
just
earn short
in a
term GDP growth15% of
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year,(in
941
rate What’s
without
15%
real 534
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terms). in 534
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method
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8 1,322
hammering a nail
534
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1,480 a growth 534
when
rate isall to you
findhave a
10 1,658
to do is hit
number 12%
which it onis 534
the head. So yet
conservative do
Final Calculations not
not over-
very low or
complicate
pessimistic,this and
Terminal Year 1,691
aspect.
close to reality in
PV of Year 1-10 Cash Flows 5,202
order to capture
Terminal Value 5,445
The beauty of old
potential future
Total PV of Cash Flows 10,647
school Graham
gains without
Current Market Cap (Rs Cr) 8,059
and Buffett too
eliminating is that
their
manyinvestments
investment
Note: See explanation of DCF here are based on
candidates.
common sense,
not volatility and
other mumbo
jumbo. There is no
hard and fast rule
for choosing a
discount rate.
Using a high
discount rate to
discount the future
cash just means
you are willing to
pay less today for
the future cash
and vice versa. Do
understand that -
“You can’t
compensate for
risk by using a
high discount
rate.”

The important
aspect is not
deciding upon a
discount rate, but
in being logical
and reasonable
about cash
high discount
rate.”

The important
aspect is not
deciding upon a
discount rate, but
in being logical
and reasonable
about cash
projections.

Another way you

can look at
discount rate is to
not using different
discount rates for
different
businesses. It
won't really matter
what rate you use
as long as you are
being intellectually
honest and
conservative about
future cash flows.
Valuation
PANY LTD

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
NATIONAL ALUMINIUM COMPANY LTD
Particulars Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16
Vishal: Highest
Net Profit (Rs Crore) 814
EPS 1,069
growth you 850 593 642 1,322 787
Net Profit Margin 16% accord
should 18%to a 13% 9% 9% 18% 12%
Return on Equity high
8%quality10% 7% 5% 5% 10% 6%
businessMaximum
Vishal: is 15%
p.a. P/E you
exit
Calculations (Enter values only in black cells)
should accord to a
Estimated CAGR in Net Profit over next 10 years 12%
high-quality
Estimated Net Profit after 10 years (Rs Cr) 5,381
business is 20x.
Current P/E (x) 4.7
Exit P/E in the 10th year from now (x, Estimated) 20.0
Esti. Market Cap (10th year from now; Rs Cr) 107,611
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 34,648
Current Market Cap (Rs Cr) 8,059

Note: See explanation of this model here

el
LTD
Mar/17 Mar/18 Mar/19 CAGR (9-Yr) CAGR (5-Yr)
669 1,342 1,732 9% 22%
9% 14% 15%
7% 13% 17%
 Intrinsic Value Range
NATIONAL ALUMINIUM COMPANY LTD
Lower Higher Remember! Give importance to a stock's valuations / fair
EPV ### only "after" you have answered in "Yes" to these two ques
Dhandho 12,905 19,124 (1) Is this business simple to be understood? and (2) Ca
Ben Graham 35,638 61,328 understand this business?
DCF 10,647 Don't try to quantify everything. In stock research, the less
Expected Return 34,648 mathematical you are, the more simple, sensible, and usef
Current Market Cap. 8,059 be your analysis and results. Great analysis is generally "b
the-envelope".

Also, your calculated "fair value" will be proven wrong in

future, so don't invest your savings just because you fall i
with it. Don't look for perfection. It is overrated. Focus
decisions, not outcomes. Look for disconfirming eviden
 importance to a stock's valuations / fair value
ave answered in "Yes" to these two questions -
ess simple to be understood? and (2) Can I
understand this business?

fy everything. In stock research, the less non-

are, the more simple, sensible, and useful will
nd results. Great analysis is generally "back-of-
the-envelope".

lated "fair value" will be proven wrong in the

vest your savings just because you fall in love
ook for perfection. It is overrated. Focus on
outcomes. Look for disconfirming evidence.
NATIONAL ALUMINIUM COMPANY LTD
SCREENER.IN
Narration Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
Sales 2,550 1,803 2,455 2,389 2,863 2,973 3,041 2,719 2,766 2,084
% Growth YOY 12% 65% 24% 14% -3% -30%
Expenses 2,122 1,575 2,119 2,045 2,373 1,962 2,190 2,206 2,249 1,870
Operating Profit 427 228 335 344 490 1,011 851 513 518 214
Other Income 59 86 97 878 64 153 90 76 7 61
Depreciation 109 117 112 124 127 122 116 118 120 126
Interest 1 0 0 1 1 1 1 1 1 2
Profit before tax 377 196 320 1,097 426 1,042 825 470 403 148
PBT Margin 15% 11% 13% 46% 15% 35% 27% 17% 15% 7%
% Growth YOY 13% 432% 158% -57% -5% -86%
Tax 108 67 85 375 169 355 315 168 170 50
Net profit 268 129 235 722 257 687 510 302 234 98
% Growth YOY -4% 433% 117% -58% -9% -86%
OPM 17% 13% 14% 14% 17% 34% 28% 19% 19% 10%
COMPANY NAME NATIONAL ALUMINIUM COMPANY LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CHANG
CURRENT VERSION 2.10

META
Number of shares 186.56
Face Value 5
Current Price 43.2
Market Capitalization 8059.47

PROFIT & LOSS

Report Date Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Sales 5055.66 6056.57 6611.57 6916.48 6780.85 7382.81
Raw Material Cost 758.10 766.12 1,030.78 1,167.83 1,063.16 1,031.59
Change in Inventory -21.63 61.68 -2.71 64.25 -58.55 -2.90
Power and Fuel 1606.61 1778.15 2220.12 2456.07 2038.26 1826.37
Other Mfr. Exp 459.82 616.18 667.89 678.62 733.97 738.91
Employee Cost 843.6 961.16 1034.54 1153.93 1245.33 1377.91
Selling and admin 242.52 280.67 355.04 399.96 437.61 427.31
Other Expenses 44.4 23.18 164.4 48.95 116.52 105.05
Other Income 480.46 353.4 660.38 511.05 557.71 821.06
Depreciation 319.39 421.72 466.55 505.43 524.73 413.66
Interest 85.41 100.64 132.17 175.95 202.62 166.75
Profit before tax 1154.86 1523.83 1197.75 905.04 917.81 2113.42
Tax 340.64 454.53 348.25 312.21 275.46 791.57
Net profit 814.22 1069.3 849.5 592.83 642.35 1321.85
Dividend Amount 161.08 386.59 257.72 322.15 386.59 451.02

Quarters
Report Date Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
Sales 2549.71 1802.69 2454.76 2388.82 2863.16 2973.31
Expenses 2122.24 1575.19 2119.3 2045.11 2373.49 1962.22
Other Income 58.94 85.86 97.18 878.08 63.72 153.12
Depreciation 108.61 116.97 112.32 124.34 126.77 121.7
Interest 0.99 0.44 0.44 0.51 0.56 0.57
Profit before tax 376.81 195.95 319.88 1096.94 426.06 1041.94
Tax 108.44 67.01 85.25 375.16 169 354.89
Net profit 268.37 128.94 234.63 721.78 257.06 687.05
Operating Profit 427.47 227.5 335.46 343.71 489.67 1011.09
BALANCE SHEET
Report Date Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Equity Share Capital 644.31 1288.62 1288.62 1288.62 1288.62 1288.62
Reserves 9751.27 9875.99 10426.46 10643.83 10833.83 11508.68
Borrowings 8.61 14.88
Other Liabilities 2995.69 3937.57 3993.74 4618.17 4681.11 3549.68
Total 13399.88 15117.06 15708.82 16550.62 16803.56 16346.98
Net Block 4836.31 5493.53 6612.35 6628.89 6791.94 6645.42
Capital Work in Progress 2243.4 1706.82 684.44 1001.92 768.74 549.73
Investments 986.75 1,331.67 754.26 1490.06 1245.04 951.04
Other Assets 5333.42 6585.04 7657.77 7429.75 7997.84 8200.79
Total 13399.88 15117.06 15708.82 16550.62 16803.56 16346.98
Receivables 181.78 111.66 138.12 148.65 243.57 120.82
Inventory 944.92 1,071.00 1,195.80 1,380.64 1,173.93 1,165.56
Cash & Bank 3152.35 3795.23 4168.35 3504.38 4048.29 4627.98
No. of Equity Shares 644309628 2.577E+09 2.577E+09 2.577E+09 2.577E+09 2.577E+09
New Bonus Shares ###
Face value 10 5 5 5 5 5

CASH FLOW:
Report Date Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Cash from Operating Activity 1171.65 1630.48 886.7 441.46 981.34 520.47
Cash from Investing Activity -593.14 -768.48 -82.28 -876.92 78.05 565.72
Cash from Financing Activity -295.2 -219.12 -431.3 -228.51 -515.48 -506.5
Net Cash Flow 283.31 642.88 373.12 -663.97 543.91 579.69

PRICE: 101.87 95.6 54.45 33.15 39.75 46.65

DERIVED:
Adjusted Equity Shares in Cr 257.72 257.72 257.72 257.72 257.72 257.72
DO NOT MAKE ANY CHANGES TO THIS SHEET

Mar-16 Mar-17 Mar-18 Mar-19

6817.66 7543.04 9509.45 11499.32
1,104.41 1,181.79 1,465.31 1,919.68
8.99 96.59 -47.43 5.08
1888.79 2236.71 2774.63 2956.49
720.11 714.18 813.72 897.4
1398.33 1537.44 2261.2 2072.28
444.94 497.04 522.96 543.16
309.91 392.82 273.19 222.86
657.88 368.12 1170.17 325.87
426.12 480.36 480.4 476.1
3.27 2.69 1.95 2.38
1188.65 964.72 2038.83 2739.92
401.54 296.19 696.42 1007.52
787.11 668.53 1342.41 1732.4
515.45 541.22 1101.76 1072.73

Sep-18 Dec-18 Mar-19 Jun-19

3040.93 2718.88 2766.2 2084.08
2190 2205.92 2248.65 1869.72
90.27 75.8 6.68 61.39
115.98 118.11 120.31 126.4
0.61 0.60 0.60 1.63
824.61 470.05 403.32 147.72
314.61 168.29 169.73 49.94
510 301.76 233.59 97.78
850.93 512.96 517.55 214.36
 Mar-16 Mar-17 Mar-18 Mar-19
1288.62 966.46 966.46 932.81
11906.13 9239.33 9538.35 9551.7
51.09 44.99 66.79
3751.99 4505.06 4417.12 5028.05
16946.74 14761.94 14966.92 15579.35
6595.68 7144.43 7139.46 7285.78
687.7 566 915.22 882.71
1010.36 1260.68 710.57 256.59
8653 5790.83 6201.67 7154.27
16946.74 14761.94 14966.92 15579.35
235.21 184.25 258.13 240.52
1,055.01 1,155.93 1,194.08 1,210.01
5103.15 2287.23 2768.95 3496.35
2.577E+09 1932928884 1932928884 1865617498

5 5 5 5

Mar-16 Mar-17 Mar-18 Mar-19

880.81 1435.94 1590.33 2408.85
313.96 1550.34 -490.16 -531.85
-544.03 -3615.87 -1099.65 -1730.75
650.74 -629.59 0.52 146.25

39.5 76.5 66.45 55.45

257.72 193.29 193.29 186.56

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