Safal Niveshak Stock Analysis Excel (Ver.

4
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
statement table called "Quarterly Results" and click on "View Consolidated". Now, all data you see for this company will be con
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"
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 Warning! Excel can be a wonde
deadly weapon if you wish t
Analysis Excel (Ver. 4.0) careful of what you are gettin
garbage out. And if you need th
given stock, you m
www.safalniveshak.com
Basic Company Details
Parameters Details
Company NESTLE INDIA LTD
Current Stock Price (Rs) 16,496 Remember! Focus on decision
Face Value (Rs) 10.0 evidenc
No. of Shares (Crore) 9.6
Market Capitalization (Rs Crore) 159,050

Key Financials - Trend

Parameters Details
Sales Growth (9-Year CAGR) 7.9% Please! It's your money. Plea
cause you to lose it all! I've des
Profit Before Tax Growth (9-Year CAGR) 9.9% but you alone are responsible
Net Profit Growth (8-Year CAGR) 10.2% ever after! I am not a sadist
Average Debt/Equity (5-Years, x) 0.0 analyzing companies on you
instead of a map, for you can co
Average Return on Equity (5-Years) 46.4%
Average P/E (5-Years, x) 71.7
Latest P/E (x) 78.3
Warning! Excel can be a wonderful tool to analyze the past. But it can be a
deadly weapon if you wish to use it to predict the future! So be very
careful of what you are getting into. Here, garbage in will always equal
garbage out. And if you need the excel to tell you what you must do with a
given stock, you must not use this tool anyways.

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
NESTLE INDIA LTD
Rs Cr Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19
Equity Share Capital 96 96 96 96 96 96 96 96 96 96
Reserves 759 1,178 1,702 2,272 2,741 2,721 3,186 3,324 3,577 1,836
Borrowings - 971 1,050 1,189 20 18 33 35 35 53
Other Liabilities 1,703 2,157 2,315 2,756 2,963 3,251 3,495 3,907 4,379 5,073
Total 2,558 4,402 5,164 6,314 5,820 6,086 6,810 7,363 8,088 7,058

Net Block 1,013 1,576 3,204 3,369 3,177 2,898 2,730 2,616 2,401 2,227
Capital Work in Progress 349 1,372 344 295 245 231 188 94 105 143
Investments 151 134 365 851 812 1,325 1,756 1,979 2,658 1,751
Other Assets 1,046 1,320 1,251 1,799 1,586 1,633 2,136 2,673 2,924 2,937
Total 2,558 4,402 5,164 6,314 5,820 6,086 6,810 7,363 8,088 7,058

Working Capital -657 -837 -1,065 -957 -1,376 -1,618 -1,358 -1,233 -1,455 -2,136
Debtors 63 115 88 84 99 78 98 89 125 124
Inventory 576 734 746 736 844 821 940 902 966 1,283
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 4 6 4 3 4 4 4 3 4 4
Inventory Turnover 11 10 11 12 12 10 10 11 12 10
Fixed Asset Turnover 6.2 4.8 2.6 2.7 3.1 2.8 3.3 3.8 4.7 5.6
Debt/Equity - 0.8 0.6 0.5 0.0 0.0 0.0 0.0 0.0 0.0
Return on Equity 96% 75% 59% 47% 42% 20% 31% 36% 44% 102%
Return on Capital Employed 134% 62% 55% 48% 63% 29% 49% 56% 69% 141%
 Profit & Loss Account / Income Statement
NESTLE INDIA LTD
Rs Cr Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Trailing
Sales 6,255 7,515 8,335 9,101 9,855 8,175 9,141 10,010 11,292 12,369 12,691
% Growth YOY 20% 11% 9% 8% -17% 12% 9% 13% 10%
Expenses 5,016 5,990 6,509 7,153 7,823 6,620 7,313 7,913 8,675 9,505 9,755
Material Cost (% of Sales) 42% 41% 39% 36% 47% 42% 35% 37% 34% 37% Check for wide fluctuations in key
Power and Fuel 4% 4% 4% 4% 4% 3% 3% 3% 3% 3% expense items. For manufacturing firms,
Other Mfr. Exp 10% 10% 10% 10% 2% 2% 9% 9% 8% 8% check their material costs etc. For
Employee Cost 7% 7% 8% 8% 8% 11% 10% 10% 10% 10% services firms, look at employee costs.
Selling and Admin Cost 17% 16% 16% 17% 17% 20% 19% 18% 19% 18%
Operating Profit 1,239 1,525 1,825 1,948 2,032 1,555 1,829 2,097 2,618 2,864 2,936
Operating Profit Margin 20% 20% 22% 21% 21% 19% 20% 21% 23% 23% 23%
Other Income 35 21 31 97 94 -391 161 177 259 247 217
Other Income as % of Sales 0.6% 0.3% 0.4% 1.1% 1.0% -4.8% 1.8% 1.8% 2.3% 2.0% 1.7%
Depreciation 128 153 277 330 338 347 354 342 336 316 344
Interest 1 5 27 37 14 3 91 92 112 120 132
Interest Coverage(Times) 1,061 273 59 47 126 248 18 21 23 23 21
Profit before tax (PBT) 1,145 1,388 1,553 1,678 1,774 814 1,545 1,839 2,429 2,675 2,677
% Growth YOY 21% 12% 8% 6% -54% 90% 19% 32% 10%
PBT Margin 18% 18% 19% 18% 18% 10% 17% 18% 22% 22% 21%
Tax 326 426 485 561 590 250 544 614 822 705 646
Net profit 819 962 1,068 1,117 1,185 563 1,001 1,225 1,607 1,970 2,031
% Growth YOY 17% 11% 5% 6% -52% 78% 22% 31% 23%
Net Profit Margin 13% 13% 13% 12% 12% 7% 11% 12% 14% 16% 16%
EPS 84.9 99.7 110.8 115.9 122.9 58.4 103.9 127.1 166.7 204.3 210.7
% Growth YOY 17% 11% 5% 6% -52% 78% 22% 31% 23%
Price to earning 44.9 41.1 45.1 45.6 52.0 99.7 58.0 61.9 66.5 72.4 78.3
Price 3,814 4,095 4,992 5,289 6,385 5,828 6,028 7,871 11,085 14,785 16,496
Dividend Payout 57.1% 48.6% 43.8% 41.9% 51.3% 83.0% 60.7% 67.7% 69.0% 167.4%
Market Cap 36,765 39,474 48,126 50,988 61,550 56,182 58,113 75,875 106,858 142,531
Retained Earnings 351 494 600 649 577 96 394 396 498 -1,328
Buffett's $1 Test 38.8

TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS

Sales Growth 7.9% 5.8% 4.6% 10.6%
PBT Growth 9.9% 8.1% 8.6% 20.1%
PBT Margin 18.0% 17.8% 17.7% 20.5%
Price to Earning 58.7 65.2 71.7 66.9

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
NESTLE INDIA LTD
Rs Cr Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Total
Cash from Operating Activity (CFO) 1,037 1,158 1,693 1,796 1,644 1,098 1,466 1,818 2,052 2,234 15,997
% Growth YoY 12% 46% 6% -8% -33% 33% 24% 13% 9%
Cash from Investing Activity -446 -1,528 -941 -441 -432 -70 -126 -131 -52 83 -4,084
Cash from Financing Activity -544 323 -513 -580 -1,635 -498 -666 -997 -1,317 -3,540 -9,967
Net Cash Flow 47 -47 239 775 -423 529 674 691 683 -1,223 1,945
CFO/Sales 17% 15% 20% 20% 17% 13% 16% 18% 18% 18%
CFO/Net Profit 127% 120% 159% 161% 139% 195% 146% 148% 128% 113%
Capex** 448 1,557 977 345 415 151 207 199 166 155
FCF 589 -399 716 1,451 1,229 947 1,259 1,619 1,886 2,079 11,377
Capex as % of Capital Employed 34 10 15 5 6 6 4 8
76 -390 136 24 34 16 16 12 9 7
Average FCF (3 Years) 1,861
FCF Growth YoY -168% -280% 103% -15% -23% 33% 29% 17% 10%
FCF/Sales 9% -5% 9% 16% 12% 12% 14% 16% 17% 17%
FCF/Net Profit 72% -41% 67% 130% 104% 168% 126% 132% 117% 106%
 Key Ratios
NESTLE INDIA LTD
Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18
Sales Growth 20.1% 10.9% 9.2% 8.3% -17.0% 11.8% 9.5% 12.8%
PBT Growth 21.2% 11.9% 8.1% 5.7% -54.1% 89.9% 19.0% 32.1%
Net Profit Growth 17.5% 11.1% 4.6% 6.0% -52.5% 77.8% 22.4% 31.2%
Dividend Growth 0.0% 0.0% 0.0% 29.9% -23.0% 29.9% 36.5% 33.7%
Operating Cash Flow Growth 11.7% 46.2% 6.1% -8.5% -33.2% 33.5% 24.0% 12.9%
Free Cash Flow Growth -167.7% ### 102.6% -15.3% -22.9% 32.9% 28.6% 16.5%

Operating Margin 19.8% 20.3% 21.9% 21.4% 20.6% 19.0% 20.0% 20.9% 23.2%
PBT Margin 18.3% 18.5% 18.6% 18.4% 18.0% 10.0% 16.9% 18.4% 21.5%
Net Margin 13.1% 12.8% 12.8% 12.3% 12.0% 6.9% 11.0% 12.2% 14.2%

Debtor Days 3.7 5.6 3.8 3.4 3.7 3.5 3.9 3.2 4.0
Inventory Turnover 10.9 10.2 11.2 12.4 11.7 10.0 9.7 11.1 11.7
Fixed Asset Turnover 6.2 4.8 2.6 2.7 3.1 2.8 3.3 3.8 4.7
Debt/Equity - 0.8 0.6 0.5 0.0 0.0 0.0 0.0 0.0
Debt/Assets 0.0% 22.1% 20.3% 18.8% 0.3% 0.3% 0.5% 0.5% 0.4%
Interest Coverage (Times) ### 272.6 59.4 47.0 125.7 248.3 18.0 21.0 22.7
Return on Equity 95.7% 75.5% 59.4% 47.2% 41.8% 20.0% 30.5% 35.8% 43.7%
Return on Capital Employed 134.0% 62.1% 55.4% 48.2% 62.6% 28.8% 49.4% 55.9% 68.5%
Free Cash Flow (Rs Cr) 589 -399 716 1,451 1,229 947 1,259 1,619 1,886
Dec/19
9.5%
10.1%
22.6%
197.4%
8.8%
10.2%

23.2%
21.6%
15.9%

3.7
9.6
5.6
0.0
0.8%
23.3
101.9%
140.8%
2,079
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

Lower/reducing is better. Compare with industry peer(s)

Higher/rising is better. Compare with industry peer(s)
Higher/rising is better. Compare with industry peer(s)
Nil / lower than 0.5 / reducing is better
Lower is better
Look for number > 5
Look for number > 20%. Also check if the debt is low/nil. Compare with industry peer(s)
Look for number > 20%. Also check if the debt is low/nil. Compare with industry peer(s)
Look for positive and rising numbers. If the company consistently generates negative FCF over say 10 years, avoid it.
25% Profit Margin Capital Allo
160%
Check for a rising trend an
140% Numbers > 20% long term
20%
120% has zero/marginal debt. C
15% 100%
80%
10% 60%
5% Check for a rising trend and/or consistency. 40%
Compare with a close competitor 20%
0% 0%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18 Jan/10 Jan/12 J

Operating Margin PBT Margin

Net Margin ROE

14,000
Revenue Revenue and P
100%
Check for a rising trend. Check for a r
12,000 80% Compare gro
60%
10,000
40%
8,000 20% 20%
17% 11% 9%5% 8
6
6,000 0%
4,000 -20% Jan/11 Jan/13
-40%
2,000
-60%
- -80%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18
Revenue Grow
Net Profit Gro

3,000 Profit Over Time Operating and

2,500 Check
Check for a rising trend. for positive numb
2,500 2,000 which are rising over tim
2,000 1,500
1,000
1,500
500
1,000 -
500 -500 Jan/10 Jan/12
- -1,000
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18

PBT Net Profit Operating Cash F

Data for Charts (Please don't touch any number below)
Margins
Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18
Operating Margin 20% 20% 22% 21% 21% 19% 20% 21% 23%
PBT Margin 18% 18% 19% 18% 18% 10% 17% 18% 22%
Net Margin 13% 13% 13% 12% 12% 7% 11% 12% 14%

Management Effectiveness
Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18
ROE 96% 75% 59% 47% 42% 20% 31% 36% 44%
ROCE 134% 62% 55% 48% 63% 29% 49% 56% 69%

Revenue & Profit Growth

Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18 Dec/19
Revenue Growth 20% 11% 9% 8% -17% 12% 9% 13% 10%
PBT Growth 21% 12% 8% 6% -54% 90% 19% 32% 10%
Net Profit Growth 17% 11% 5% 6% -52% 78% 22% 31% 23%

Revenue & Profit

Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18
Revenue 6,255 7,515 8,335 9,101 9,855 8,175 9,141 10,010 11,292
PBT 1,145 1,388 1,553 1,678 1,774 814 1,545 1,839 2,429
Net Profit 819 962 1,068 1,117 1,185 563 1,001 1,225 1,607

Cash Flows
Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18
Operating Cash Flow 1,037 1,158 1,693 1,796 1,644 1,098 1,466 1,818 2,052
Free Cash Flow 589 -399 716 1,451 1,229 947 1,259 1,619 1,886
%
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/10 Jan/12 Jan/14 Jan/16 Jan/18

ROE ROCE

Revenue and Profit Growth (YoY)

Check for a rising trend and/or low volatility.
% Compare growth rates with78%a close competitor.

31%
20%
17% 22% 23%
11% 9% 8%
6% 12% 9% 13% 10%
5%
Jan/11 Jan/13 -17%
Jan/15 Jan/17 Jan/19

-52%

Revenue Growth PBT Growth

Net Profit Growth

Operating and Free Cash Flow

0 Check for positive numbers and
0 which are rising over time.
0
0
0
-
0 Jan/10 Jan/12 Jan/14 Jan/16 Jan/18
0

Operating Cash Flow Free Cash Flow

Dec/19
23%
22%
16%

Dec/19
102%
141%

Dec/19
12,369
2,675
1,970

Dec/19
2,234
2,079
 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 42% 41% 39% 36% 47% 42% 35% 37% 34% 37%
Change in Inventory 1% 1% 1% -1% 1% 0% 0% 1% 0% 1%
Power and Fuel 4% 4% 4% 4% 4% 3% 3% 3% 3% 3%
Other Mfr. Exp 10% 10% 10% 10% 2% 2% 9% 9% 8% 8%
Employee Cost 7% 7% 8% 8% 8% 11% 10% 10% 10% 10%
Selling and Admin Cost 17% 16% 16% 17% 17% 20% 19% 18% 19% 18%
Other Expenses 1% 2% 2% 2% 2% 3% 4% 3% 3% 2%
Operating Profit 17% 19% 20% 24% 19% 19% 20% 19% 23% 21%
Other Income 1% 0% 0% 1% 1% -5% 2% 2% 2% 2%
Depreciation 2% 2% 3% 4% 3% 4% 4% 3% 3% 3%
Interest 0% 0% 0% 0% 0% 0% 1% 1% 1% 1%
Profit Before Tax 18% 18% 19% 18% 18% 10% 17% 18% 22% 22%
Tax 5% 6% 6% 6% 6% 3% 6% 6% 7% 6%
Net Profit 13% 13% 13% 12% 12% 7% 11% 12% 14% 16%
Dividend Amount 7% 6% 6% 5% 6% 6% 7% 8% 10% 27%

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 4% 2% 2% 2% 2% 2% 1% 1% 1% 1%
Reserves 30% 27% 33% 36% 47% 45% 47% 45% 44% 26%
Borrowings 0% 22% 20% 19% 0% 0% 0% 0% 0% 1%
Other Liabilities 67% 49% 45% 44% 51% 53% 51% 53% 54% 72%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 40% 36% 62% 53% 55% 48% 40% 36% 30% 32%
Capital Work in Progress 14% 31% 7% 5% 4% 4% 3% 1% 1% 2%
Investments 6% 3% 7% 13% 14% 22% 26% 27% 33% 25%
Other Assets 41% 30% 24% 28% 27% 27% 31% 36% 36% 42%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 2% 3% 2% 1% 2% 1% 1% 1% 2% 2%
Inventory 23% 17% 14% 12% 15% 13% 14% 12% 12% 18%
Cash & Bank 10% 5% 5% 12% 8% 8% 13% 20% 20% 19%
 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.
 Dhandho Intrinsic Value Calculation
Read the book - The Dhandho Investor by Mohnish Pabrai

NESTLE INDIA LTD NESTLE INDIA LTD

Dhandho IV - Lower Range Dhandho IV - Higher Range
Year FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth Year
0 Excess Cash (Latest) 5,829 Year 1-3 15% 0 Excess Cash (Latest)
1 FY18 2,140 1,911 Year 4-6 10% 1 FY18
2 FY19 2,462 1,962 Year 7-10 5% 2 FY19
3 FY20 2,831 2,015 Discount Rate 12% 3 FY20
4 FY21 3,114 1,979 4 FY21
5 FY22 3,425 1,944 Last 5-Years' CAGR 5 FY22
6 FY23 3,768 1,909 Sales 5% 6 FY23
7 FY24 3,956 1,790 PBT 9% 7 FY24
8 FY25 4,154 1,678 FCF 11% 8 FY25
9 FY26 4,362 1,573 9 FY26
10 FY27 4,580 1,475 10 FY27
10 45,798 14,746 10
Intrinsic Value 38,809 Intrinsic Value
Current Mkt. Cap. 159,050 Current Mkt. Cap.
Premium/(Discount) to IV 310% 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 o
business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of re
Calculation
by Mohnish Pabrai

NESTLE INDIA 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%
2,234 1,994 Year 4-6 15%
2,680 2,137 Year 7-10 10%
3,216 2,289 Discount Rate 12%
3,699 2,351
4,254 2,414
4,892 2,478
5,381 2,434
5,919 2,391
6,511 2,348
7,162 2,306
107,428 34,589
Intrinsic Value 63,559
Current Mkt. Cap. 159,050
Premium/(Discount) to IV 150%

use a normalized positive FCF as the starting

, without capex. Check the history of this
ng the model to fit your version of reality.
 Ben Graham Formula (Low Range) Ben Graham Formula (High Range
Company Name NESTLE INDIA LTD Company Name
Year Ended Dec/19 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 1,273.3 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 5.4 Long-Term Growth Rate

Ben Graham Value (Rs Crore) 24,448 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 159,050 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

m Formula (High Range)
NESTLE INDIA LTD
Dec/19

1,273.3
8.5
10.7

38,074
159,050

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
present, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
 Dicounted Cash Flow Valuation
NESTLE INDIA LTD

Initial Cash Flow (Rs Cr) 1,861 42,371

###
Years 1-5 6-10 27%
FCF Growth Rate 15% 12%
Discount Rate 12%
Terminal Growth Rate 2%

Net Debt Level (Rs Cr) (5,776)

Year FCF Growth Present Value

1 2,140 15% 1,911
2 2,462 15% 1,962
3 2,831 15% 2,015
4 3,255 15% 2,069
5 3,744 15% 2,124
6 4,193 12% 2,124
7 4,696 12% 2,124
8 5,260 12% 2,124
9 5,891 12% 2,124
10 6,598 12% 2,124

Final Calculations
Terminal Year 6,730
PV of Year 1-10 Cash Flows 20,703
Terminal Value 21,668
Total PV of Cash Flows 42,371
Current Market Cap (Rs Cr) ###

Note: See explanation of DCF here

Valuation
D

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
NESTLE INDIA LTD
Particulars Dec/10 Dec/11 Dec/12 Dec/13 Dec/14 Dec/15 Dec/16
Net Profit (Rs Crore) 819 962 1,068 1,117 1,185 563 1,001
Net Profit Margin 13% 13% 13% 12% 12% 7% 11%
Return on Equity 96% 75% 59% 47% 42% 20% 31%

Calculations (Enter values only in black cells)

Estimated CAGR in Net Profit over next 10 years 12%
Estimated Net Profit after 10 years (Rs Cr) 6,117
Current P/E (x) 80.8
Exit P/E in the 10th year from now (x, Estimated) 20.0
Esti. Market Cap (10th year from now; Rs Cr) 122,342
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 39,391
Current Market Cap (Rs Cr) 159,050

Note: See explanation of this model here

el
Dec/17 Dec/18 Dec/19 CAGR (9-Yr) CAGR (5-Yr)
1,225 1,607 1,970 10% 11%
12% 14% 16%
36% 44% 102%
 Intrinsic Value Range
NESTLE INDIA LTD
Lower Higher Remember! Give importance to a stock's valuations / fai
Dhandho 38,809 63,559 only "after" you have answered in "Yes" to these two que
Ben Graham 24,448 38,074 (1) Is this business simple to be understood? and (2) C
DCF 42,371 understand this business?
Expected Return 39,391
Don't try to quantify everything. In stock research, the les
Current Market Cap. 159,050
mathematical you are, the more simple, sensible, and use
be your analysis and results. Great analysis is generally "
the-envelope".
Explanation: Considering the above
range, we can say that Hero Moto's IV Also, your calculated "fair value" will be proven wrong
range is between Rs 55,000 crore to Rs future, so don't invest your savings just because you fall
95,000 crore. It's a big range, but that's with it. Don't look for perfection. It is overrated. Focus
fine (who is looking for precision?). Now, decisions, not outcomes. Look for disconfirming evide
if the current market cap is within this IV
range, it makes the stock
reasonably/attractively priced. If the
current market cap is higher then the
higher value of the range, it makes it
overpriced. But remember, these are just
numbers!
 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.
NESTLE INDIA LTD
SCREENER.IN
Narration Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
Sales 2,601 2,757 2,698 2,939 2,897 3,003 3,001 3,216 3,149 3,325
% Growth YOY 11% 9% 11% 9% 9% 11%
Expenses 2,068 2,060 2,053 2,214 2,347 2,250 2,304 2,464 2,455 2,532
Operating Profit 533 697 645 725 551 753 697 751 694 793
Other Income 51 56 60 67 75 73 73 56 45 43
Depreciation 84 83 82 93 78 91 81 78 94 91
Interest 23 31 28 27 25 34 30 30 31 41
Profit before tax 477 640 595 672 522 701 659 700 614 704
PBT Margin 18% 23% 22% 23% 18% 23% 22% 22% 19% 21%
% Growth YOY 9% 10% 11% 4% 18% 0%
Tax 166 216 200 226 180 238 221 104 141 178
Net profit 312 424 395 446 342 463 438 595 473 525
% Growth YOY 10% 9% 11% 33% 38% 14%
OPM 21% 25% 24% 25% 19% 25% 23% 23% 22% 24%
COMPANY NAME NESTLE INDIA LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CH
CURRENT VERSION 2.10

META
Number of shares 9.64
Face Value 10
Current Price 16496.3
Market Capitalization 159050.26

PROFIT & LOSS

Report Date Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15
Sales 6254.74 7514.55 8334.53 9101.05 9854.84 8175.31
Raw Material Cost 2,655.79 3,052.64 3,238.44 3,313.68 4,591.39 3,456.94
Change in Inventory 82.94 48.28 92.02 -105.32 67.43 -11.97
Power and Fuel 219.2 295.81 370.89 385.38 384.33 221.99
Other Mfr. Exp 647.17 753.26 815.2 895.68 197.11 170.61
Employee Cost 433.44 546.46 663.38 741.5 837.05 912.75
Selling and admin 1073.21 1236.55 1374.62 1528.64 1680.48 1615.41
Other Expenses 69.65 153.12 138.68 183.27 199.82 230.71
Other Income 34.72 21.37 31.03 96.9 94.03 -390.75
Depreciation 127.75 153.33 277.15 329.95 337.54 347.26
Interest 1.08 5.11 26.6 36.51 14.23 3.29
Profit before tax 1145.11 1387.92 1552.62 1678.02 1774.35 813.63
Tax 326.44 426.37 484.69 560.89 589.66 250.36
Net profit 818.67 961.55 1067.93 1117.13 1184.69 563.27
Dividend Amount 467.64 467.64 467.64 467.64 607.45 467.64

Quarters
Report Date Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19
Sales 2601.46 2757.24 2698.4 2939.36 2897.27 3002.95
Expenses 2067.99 2060.39 2053.36 2214.16 2346.71 2250.25
Other Income 51.09 56.43 60.23 67.03 75.23 73.19
Depreciation 83.76 82.53 81.71 93.01 78.42 91.38
Interest 23.39 31.07 28.25 27.46 25.17 33.90
Profit before tax 477.41 639.68 595.31 671.76 522.2 700.61
Tax 165.58 215.65 200.28 225.65 180.44 237.87
Net profit 311.83 424.03 395.03 446.11 341.76 462.74
Operating Profit 533.47 696.85 645.04 725.2 550.56 752.7

BALANCE SHEET
Report Date Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15
Equity Share Capital 96.42 96.42 96.42 96.42 96.42 96.42
Reserves 759 1177.54 1701.99 2272.33 2740.79 2721.42
Borrowings 970.87 1,050.19 1,189.49 19.57 17.73
Other Liabilities 1702.88 2156.95 2315.32 2756.03 2962.72 3250.76
Total 2558.3 4401.78 5163.92 6314.27 5819.5 6086.33
Net Block 1012.74 1575.75 3204.27 3369.31 3176.64 2897.85
Capital Work in Progress 348.91 1371.78 344.08 294.71 244.78 230.79
Investments 150.68 134.37 364.86 851.08 811.82 1324.92
Other Assets 1045.97 1319.88 1250.71 1799.17 1586.26 1632.77
Total 2558.3 4401.78 5163.92 6314.27 5819.5 6086.33
Receivables 63.29 115.42 87.57 84.27 99.1 78.42
Inventory 575.95 734.04 745.58 735.93 844.10 820.81
Cash & Bank 255.29 227.21 236.96 749.36 445.82 499.55
No. of Equity Shares 96415716 96415716 96415716 96415716 96415716 96415716
New Bonus Shares
Face value 10 10 10 10 10 10

CASH FLOW:
Report Date Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15
Cash from Operating Activity 1036.82 1158.17 1693.38 1796.4 1644.02 1098.1
Cash from Investing Activity -445.88 -1528.47 -940.83 -440.94 -431.7 -70.48
Cash from Financing Activity -543.81 323.19 -513.16 -580.12 -1635.28 -498.32
Net Cash Flow 47.13 -47.11 239.39 775.34 -422.96 529.3

PRICE: 3813.75 4094.85 4992.3 5289.25 6384.85 5828

DERIVED:
Adjusted Equity Shares in Cr 9.64 9.64 9.64 9.64 9.64 9.64
DO NOT MAKE ANY CHANGES TO THIS SHEET

Dec-16 Dec-17 Dec-18 Dec-19

9141.34 10009.6 11292.27 12368.9
3,227.26 3,696.99 3,829.22 4,520.91
7.66 79.56 6.01 144.19
232.79 288.44 344.18 340.53
850.85 897.84 949.86 1028.55
901.57 1017.45 1124.15 1262.95
1751.78 1823.98 2145.82 2283.98
356.13 267.93 287.4 211.87
161.34 176.92 258.92 246.88
353.67 342.25 335.67 316.36
90.91 91.9 111.95 119.83
1545.38 1839.3 2428.95 2674.99
544.02 614.11 822.02 705.44
1001.36 1225.19 1606.93 1969.55
607.45 829.21 1108.83 3297.56

Jun-19 Sep-19 Dec-19 Mar-20

3000.85 3215.81 3149.29 3325.27
2303.55 2464.38 2455.21 2531.96
72.59 56.4 44.7 42.85
80.82 78.02 93.56 91.35
29.92 29.92 31.12 40.96
659.15 699.89 614.1 703.85
221.31 104.48 141.46 178.42
437.84 595.41 472.64 525.43
697.3 751.43 694.08 793.31
Dec-16 Dec-17 Dec-18 Dec-19
96.42 96.42 96.42 96.42
3185.91 3324.17 3577.32 1835.84
33.15 35.14 35.14 53.14
3494.98 3906.86 4379.2 5072.8
6810.46 7362.59 8088.08 7058.2
2730.14 2616.18 2400.62 2226.71
188.17 94.16 105.2 143.3
1755.66 1978.87 2658.49 1751.05
2136.49 2673.38 2923.77 2937.14
6810.46 7362.59 8088.08 7058.2
97.93 88.97 124.59 124.33
940.06 902.47 965.55 1,283.07
880 1457.42 1610.06 1308.05
96415716 96415716 96415716 96415716

10 10 10 10

Dec-16 Dec-17 Dec-18 Dec-19

1465.91 1817.79 2052.45 2233.67
-125.9 -130.56 -52.41 82.99
-665.61 -996.62 -1317.42 -3539.95
674.4 690.61 682.62 -1223.29

6028.35 7870.9 11084.85 14785.35

9.64 9.64 9.64 9.64

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