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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"
which you must update manually from the company's annual reports. Don’t forget to make these changes as these numbers are
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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.
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
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.
Debtor Days - - - - - - - 17 16 13
Inventory Turnover - - - - - - - - - -
Fixed Asset Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! 21.4 25.1 27.2 27.1 26.6 20.0
Debt/Equity #DIV/0! #DIV/0! #DIV/0! #DIV/0! 5.6 5.1 5.1 4.2 5.2 4.0
Return on Equity 19% 17% 19% 16% 20% 16%
Return on Capital Employed #DIV/0! #DIV/0! #DIV/0! #DIV/0! 12% 11% 11% 10% 11% 10%
Profit & Loss Account / Income Statement
BAJAJ FINANCE LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Trailing
Sales - - - - 5,392 7,299 9,970 12,746 18,487 26,375 26,369
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 35% 37% 28% 45% 43%
Expenses - - - - 1,752 2,354 3,250 4,115 5,454 9,159 9,295
Material Cost (% of Sales) #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0% Check for wide fluctuations in key
Power and Fuel #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0% expense items. For manufacturing firms,
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 4% 4% check their material costs etc. For
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 8% 9% 9% 11% 11% 10% services firms, look at employee costs.
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 9% 8% 11% 5% 4%
Operating Profit - - - - 3,641 4,945 6,720 8,631 13,033 17,217 17,073
Operating Profit Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 68% 68% 67% 68% 70% 65% 65%
Other Income - - - - 26 35 22 10 13 8 17
Other Income as % of Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.5% 0.5% 0.2% 0.1% 0.1% 0.0% 0.1%
Depreciation - - - - 36 56 71 102 144 295 295
Interest - - - - 2,274 2,959 3,853 4,696 6,723 9,608 9,473
Interest Coverage(Times) #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2 2 2 2 2 2 2
Profit before tax (PBT) - - - - 1,357 1,965 2,817 3,843 6,179 7,322 7,322
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 45% 43% 36% 61% 18%
PBT Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25% 27% 28% 30% 33% 28% 28%
Tax - - - - 459 686 981 1,347 2,184 2,058 2,058
Net profit - - - - 898 1,279 1,836 2,496 3,995 5,264 5,264
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 42% 44% 36% 60% 32%
Net Profit Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 17% 18% 18% 20% 22% 20% 20%
EPS - - - - 17.9 23.7 33.4 43.2 69.1 87.5 87.3
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 33% 41% 29% 60% 27%
Price to earning 22.9 29.2 35.1 40.9 43.8 25.3 37.9
Price - - - - 411 692 1,171 1,768 3,025 2,216 3,314
Dividend Payout 0.0% 0.0% 0.0% 0.0% 10.0% 10.5% 10.7% 9.2% 8.7% 11.4%
Market Cap - - - - 20,604 37,287 64,399 ### ### ###
Retained Earnings - - - - 808 1,145 1,640 2,266 3,649 4,664
Buffett's $1 Test 9.4
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
BAJAJ FINANCE LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Total
Cash from Operating Activity (CFO) - - - - -7,064 -9,870 ### ### ### ### ###
% Growth YoY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 40% 6% 97% 41% -16%
Cash from Investing Activity - - - - -360 -687 -3,047 1,075 -5,379 -8,757 -17,154
Cash from Financing Activity - - - - 6,867 11,656 12,513 19,503 34,449 34,181 119,170
Net Cash Flow - - - - -557 1,100 -972 13 9 998 590
CFO/Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! -131% -135% -105% -161% -157% -93%
CFO/Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! -787% -772% -568% -824% -727% -464%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -315 -212 -364 -565 -7,671 ### ### ### ### ### ###
Average FCF (3 Years) -25,918
FCF Growth YoY -33% 72% 55% 1258% 41% 7% 91% 36% -17%
FCF/Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! -142% -148% -116% -174% -164% -96%
FCF/Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! -854% -845% -631% -889% -758% -480%
Operating Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 67.5% 67.8% 67.4% 67.7% 70.5%
PBT Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25.2% 26.9% 28.3% 30.2% 33.4%
Net Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 16.7% 17.5% 18.4% 19.6% 21.6%
65.3%
27.8%
20.0%
13.2
-
20.0
4.0
79.0%
1.8
16.3%
10.4%
###
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
30,000
Revenue Revenue and Pr
70%
Check for a rising trend. Check for a r
25,000 60% Compare gro
20,000 50%
40%
15,000
30%
10,000
20%
5,000
10%
- 0%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Jan/19 Jan/10 Jan/12 Jan
Revenue Grow
Net Profit Gro
Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
ROE 19% 17% 19% 16% 20%
ROCE #DIV/0! #DIV/0! #DIV/0! #DIV/0! 12% 11% 11% 10% 11%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
Operating Cash Flow - - - - -7,064 -9,870 -10,439 -20,566 -29,062
Free Cash Flow -315 -212 -364 -565 -7,671 -10,807 -11,595 -22,204 -30,300
%
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 Jan/19
ROE ROCE
Mar/20
16%
10%
Mar/20
26,375
7,322
5,264
Mar/20
-24,426
-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 #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0%
Change in Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0%
Power and Fuel #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0%
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 4% 4%
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 8% 9% 9% 11% 11% 10%
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 9% 8% 11% 5% 4%
Other Expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! 14% 14% 15% 10% 10% 17%
Operating Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! 68% 68% 67% 68% 70% 65%
Other Income #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0%
Depreciation #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1% 1% 1% 1% 1% 1%
Interest #DIV/0! #DIV/0! #DIV/0! #DIV/0! 42% 41% 39% 37% 36% 36%
Profit Before Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25% 27% 28% 30% 33% 28%
Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! 9% 9% 10% 11% 12% 8%
Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! 17% 18% 18% 20% 22% 20%
Dividend Amount #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2% 2% 2% 2% 2% 2%
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
Avg 5-Yr Net Profit (Rs Crore) 2,974.0 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 21.2 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 151,481 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 199,730 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
2,974.0
8.5
42.4
277,682
199,730
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.
Dicounted Cash Flow Valuation
BAJAJ FINANCE LTD
Final Calculations
Terminal Year ###
PV of Year 1-10 Cash Flows ###
Terminal Value ###
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) ###
META
Number of shares 60.27
Face Value 2
Current Price 3314.15
Market Capitalization 199730.47
Quarters
Report Date Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19
Sales 3371.42 3487.7 3936.24 4261.36 4985.39 5294.49
Expenses 1104.8 1090.84 1252.47 1239.98 1529.59 1532.24
Other Income 2.68 3.89 1.53 11.94 6.68 3.52
Depreciation 26.78 29.3 28.87 33.38 41.09 40.82
Interest 1,178.76 1,227.28 1,359.09 1,565.43 1,785.72 1,913.32
Profit before tax 1063.76 1144.17 1297.34 1434.51 1635.67 1811.63
Tax 373.73 396.62 461.45 511.04 576.11 635.57
Net profit 690.03 747.55 835.89 923.47 1059.56 1176.06
Operating Profit 2266.62 2396.86 2683.77 3021.38 3455.8 3762.25
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-15 Mar-16
Equity Share Capital 50 53.55
Reserves 4749.71 7271.18
Borrowings 26,654.59 37,024.59
Other Liabilities 1325.47 2623.75
Total 32779.77 46973.07
Net Block 252.45 290.27
Capital Work in Progress
Investments 326.29 1029.1
Other Assets 32201.03 45653.7
Total 32779.77 46973.07
Receivables
Inventory
Cash & Bank 229.83 1330.85
No. of Equity Shares 50147300 53872190
New Bonus Shares
Face value 10 10
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-15 Mar-16
Cash from Operating Activity -7064.17 -9869.67
Cash from Investing Activity -360.06 -686.82
Cash from Financing Activity 6867.08 11656.2
Net Cash Flow -557.15 1099.71
DERIVED:
Adjusted Equity Shares in Cr 26.94 26.94 26.94 26.94 50.15 53.85
DO NOT MAKE ANY CHANGES TO THIS SHEET
769.37 1142.13
934.14 1437.07 1942.7 2554.74
787.34 1405.75 959.41 1102.76
1528.9 1272.03 1782.73 4359.29
21.89 10.2 13.04 7.89
71.17 102.07 144.15 294.63
3852.97 4696.11 6,722.66 9,607.67
2817.41 3843.44 6179.16 7322.12
981.03 1347.07 2184.17 2058.37
1836.38 2496.37 3994.99 5263.75
196.87 230.06 346.11 599.95
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