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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"
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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
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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.
Net Block - - - - 5 6 4 4 5 30
Capital Work in Progress - - - - - - - - - 0
Investments - - - - - - 13 22 33 41
Other Assets - - - - 47 57 47 52 64 76
Total - - - - 52 63 64 77 102 147
Working Capital - - - - 24 23 22 23 30 34
Debtors - - - - 31 37 33 33 38 39
Inventory - - - - 2 1 1 1 1 3
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 - - - - 79 72 91 87 83 73
Inventory Turnover - - - - 91 136 140 179 147 74
Fixed Asset Turnover #DIV/0! #DIV/0! #DIV/0! #DIV/0! 27.7 29.2 33.4 36.6 32.4 6.5
Debt/Equity #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.2 0.1 0.2 0.0 0.0 0.3
Return on Equity 18% 4% 37% 32% 30% 19%
Return on Capital Employed #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25% 11% 42% 39% 36% 19%
Profit & Loss Account / Income Statement
APOLLO SINDOORI HOTELS 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 - - - - 141 186 133 140 165 193 173
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 32% -29% 5% 18% 18%
Expenses - - - - 133 178 121 130 153 185 169
Material Cost (% of Sales) #DIV/0! #DIV/0! #DIV/0! #DIV/0! 26% 29% 31% 31% 0% 0% Check for wide fluctuations in key
Power and Fuel #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 3% 3% 0% 0% 0% expense items. For manufacturing firms,
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2% 2% 2% 1% 35% 40% check their material costs etc. For
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 55% 54% 50% 55% 52% 50% services firms, look at employee costs.
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6% 5% 6% 6% 6% 5%
Operating Profit - - - - 8 8 12 10 11 8 4
Operating Profit Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6% 4% 9% 7% 7% 4% 2%
Other Income - - - - 1 -4 6 10 14 15 15
Other Income as % of Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.5% -2.0% 4.2% 7.3% 8.7% 7.7% 8.4%
Depreciation - - - - 1 1 1 1 1 3 5
Interest - - - - 1 1 1 1 0 2 3
Interest Coverage(Times) #DIV/0! #DIV/0! #DIV/0! #DIV/0! 12 3 27 33 111 12 5
Profit before tax (PBT) - - - - 7 2 16 18 24 19 10
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! -70% 690% 17% 31% -23%
PBT Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 5% 1% 12% 13% 15% 10% 6%
Tax - - - - 2 1 4 3 4 3 1
Net profit - - - - 4 1 12 15 21 15 9
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! -78% 1148% 26% 35% -25%
Net Profit Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 1% 9% 11% 12% 8% 5%
EPS - - - - 17.0 3.7 46.6 58.5 79.0 58.9 34.4
% Growth YOY #DIV/0! #DIV/0! #DIV/0! #DIV/0! -78% 1148% 26% 35% -25%
Price to earning 29.1 6.6 10.8 11.2 6.7 23.6
Price - - - - - 109 309 629 883 392 811
Dividend Payout 0.0% 0.0% 0.0% 0.0% 8.8% 40.2% 3.2% 4.3% 3.8% 3.4%
Market Cap - - - - - 28 80 164 230 102
Retained Earnings - - - - 4 1 12 15 20 15
Buffett's $1 Test 1.6
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
APOLLO SINDOORI HOTELS 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) - - - - 3 6 8 18 21 22 78
% Growth YoY #DIV/0! #DIV/0! #DIV/0! #DIV/0! 132% 40% 117% 19% 5%
Cash from Investing Activity - - - - -4 -4 -9 -10 -13 -21 -61
Cash from Financing Activity - - - - -1 0 -0 -1 -1 2 -1
Net Cash Flow - - - - -2 2 -1 7 7 4 17
CFO/Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2% 3% 6% 13% 13% 12%
CFO/Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! 57% 606% 68% 117% 104% 146%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -315 -212 -364 -565 -604 -931 -1,148 -1,620 -1,217 -802 -7,778
Average FCF (3 Years) -1,213
FCF Growth YoY -33% 72% 55% 7% 54% 23% 41% -25% -34%
FCF/Sales #DIV/0! #DIV/0! #DIV/0! #DIV/0! -428% -501% -864% -1158% -739% -414%
FCF/Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! ### ### -9478% ### -5918% -5233%
Operating Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 5.5% 4.4% 8.8% 7.0% 6.7%
PBT Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 4.8% 1.1% 11.9% 13.2% 14.7%
Net Margin #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3.1% 0.5% 9.1% 10.9% 12.5%
4.3%
9.6%
7.9%
72.7
74.1
6.5
0.3
17.7%
12.4
19.3%
19.1%
-802
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
250
Revenue 1400% Revenue and P
Check for a rising trend. Check for a r
1200% Compare gro
200
1000%
150 800%
600%
100
400%
50 200%
0%
- -200%Jan/10 Jan/12 Jan
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Jan/19
Revenue Gro
Net Profit Gr
Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
ROE 18% 4% 37% 32% 30%
ROCE #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25% 11% 42% 39% 36%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
Operating Cash Flow - - - - 3 6 8 18 21
Free Cash Flow -315 -212 -364 -565 -604 -931 -1,148 -1,620 -1,217
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
ROE ROCE
Mar/20
19%
19%
Mar/20
193
19
15
Mar/20
22
-802
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! 26% 29% 31% 31% 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! 3% 3% 3% 0% 0% 0%
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2% 2% 2% 1% 35% 40%
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 55% 54% 50% 55% 52% 50%
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6% 5% 6% 6% 6% 5%
Other Expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 3% 0% 0% 0% 0%
Operating Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! 6% 4% 9% 7% 7% 4%
Other Income #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1% -2% 4% 7% 9% 8%
Depreciation #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1% 1% 1% 1% 1% 2%
Interest #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 1% 0% 0% 0% 1%
Profit Before Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! 5% 1% 12% 13% 15% 10%
Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! 2% 1% 3% 2% 2% 2%
Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 1% 9% 11% 12% 8%
Dividend Amount #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0% 0%
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) 12.8 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 14.1 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 471 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 211 Current Market Cap (Rs Crore)
EXPLANATION
Ben Graham's Original Formula: Value = EPS x (8.5 + 2G)
Here, EPS is the trailing 12 month EPS, 8.5 is the P/E ratio of a stock with 0% growth and g is the growth rate for the next 7-10
12.8
8.5
28.2
833
211
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
APOLLO SINDOORI HOTELS LTD
Final Calculations
Terminal Year (4,385)
PV of Year 1-10 Cash Flows (13,491)
Terminal Value (14,119)
Total PV of Cash Flows (27,610)
Current Market Cap (Rs Cr) 211
META
Number of shares 0.26
Face Value 5
Current Price 810.8
Market Capitalization 210.84
Quarters
Report Date Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Sales 38.76 45.85 45.4 44.41 48.28 49.63
Expenses 35.31 43.02 44.37 42.45 45.49 47.77
Other Income 3.9 3.4 3.44 4.13 3.81 2.89
Depreciation 0.24 0.24 0.27 0.29 0.27 0.5
Interest 0.01 0.04 0.04 0.02 0.21 0.13
Profit before tax 7.1 5.95 4.16 5.78 6.12 4.12
Tax 1.08 0.74 0.37 1.03 1.2 1.29
Net profit 6.02 5.21 3.78 4.75 4.92 2.83
Operating Profit 3.45 2.83 1.03 1.96 2.79 1.86
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-15 Mar-16
Equity Share Capital 1.3 1.3
Reserves 23.66 24.44
Borrowings 4.31 3.40
Other Liabilities 22.63 33.93
Total 51.9 63.07
Net Block 5.09 6.37
Capital Work in Progress
Investments
Other Assets 46.81 56.7
Total 51.9 63.07
Receivables 30.65 36.51
Inventory 1.55 1.37
Cash & Bank 4.52 5.59
No. of Equity Shares 1300200 1300200
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 2.53 5.88
Cash from Investing Activity -4.14 -4.22
Cash from Financing Activity -0.74 0.01
Net Cash Flow -2.35 1.66
PRICE: 108.5
DERIVED:
Adjusted Equity Shares in Cr - - - - 0.26 0.26
DO NOT MAKE ANY CHANGES TO THIS SHEET
10 10 5 5
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