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
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. 4.0)
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
HERO MOTOCORP LTD
2,736 Remember! Focus on decisio
2.0 Look for disconfirming eviden
20.0
54,642
Please! It's your money. Pleas
Details
results of this excel cause yo
11.3% designed this excel to aid you
12.7% you alone are responsible for y
12.5% live peacefully ever after! I am
0.0 wants you to do the hard w
34.9% companies on your own. But I
20.0 compass instead of a map, for y
with territory and lose it a
15.1
 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
HERO MOTOCORP LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Equity Share Capital 40 40 40 40 40 40 40 40 40 40
Reserves 3,761 3,425 2,916 4,250 4,966 5,560 6,501 8,794 10,071 11,729
Borrowings 78 66 693 719 642 284 - - - -
Other Liabilities 2,206 4,992 7,083 4,886 4,001 4,218 3,987 3,796 4,645 5,036
Total 6,085 8,523 10,732 9,895 9,649 10,102 10,528 12,631 14,757 16,805

Net Block 1,574 1,659 4,080 3,786 3,071 2,243 2,913 3,584 4,396 4,655
Capital Work in Progress 121 48 50 39 62 854 713 605 465 318
Investments 3,369 3,926 5,129 3,964 3,624 4,089 3,154 4,581 5,890 7,525
Other Assets 1,022 2,890 1,473 2,107 2,892 2,916 3,749 3,860 4,006 4,307
Total 6,085 8,523 10,732 9,895 9,649 10,102 10,528 12,631 14,757 16,805

Working Capital -1,184 -2,102 -5,610 -2,779 -1,109 -1,302 -238 64 -639 -729
Debtors 150 108 131 272 665 921 1,390 1,283 1,562 1,520
Inventory 327 436 525 676 637 670 815 673 656 824
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 4 3 2 4 10 13 18 16 20 17
Inventory Turnover 38 36 37 35 37 38 34 42 43 39
Fixed Asset Turnover 7.8 9.5 4.8 6.2 7.7 11.3 9.5 7.9 6.5 6.9
Debt/Equity 0.0 0.0 0.2 0.2 0.1 0.1 - - - -
Return on Equity 34% 64% 65% 55% 42% 38% 36% 36% 33% 31%
Return on Capital Employed 46% 80% 66% 58% 45% 49% 51% 50% 46% 45%
 Profit & Loss Account / Income Statement
HERO MOTOCORP LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Trailing
Sales 12,319 15,758 19,398 23,579 23,768 25,275 27,585 28,443 28,500 32,230 34,330
% Growth YOY 28% 23% 22% 1% 6% 9% 3% 0% 13%
Expenses 10,635 13,096 16,865 19,960 20,484 21,735 24,198 23,988 23,866 26,950 29,098
Material Cost (% of Sales) 71% 68% 73% 74% 73% 72% 72% 68% 67% 68% Check for wide fluctuations in key
Power and Fuel 1% 1% 1% 0% 1% 1% 1% 0% 0% 0% expense items. For manufacturing firms,
Other Mfr. Exp 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% check their material costs etc. For
Employee Cost 3% 3% 3% 3% 3% 4% 4% 5% 5% 5% services firms, look at employee costs.
Selling and Admin Cost 9% 9% 7% 5% 6% 6% 7% 7% 7% 7%
Operating Profit 1,684 2,662 2,533 3,619 3,284 3,540 3,387 4,455 4,635 5,280 5,231
Operating Profit Margin 14% 17% 13% 15% 14% 14% 12% 16% 16% 16% 15%
Other Income 280 363 290 365 398 446 493 422 522 526 694
Other Income as % of Sales 2.3% 2.3% 1.5% 1.5% 1.7% 1.8% 1.8% 1.5% 1.8% 1.6% 2.0%
Depreciation 181 191 402 1,097 1,142 1,107 540 438 493 556 600
Interest 3 2 15 21 12 12 11 5 6 6 8
Interest Coverage(Times) 705 1,349 160 135 213 244 301 908 771 840 670
Profit before tax (PBT) 1,781 2,832 2,405 2,865 2,529 2,867 3,329 4,435 4,658 5,244 5,317
% Growth YOY 59% -15% 19% -12% 13% 16% 33% 5% 13%
PBT Margin 14% 18% 12% 12% 11% 11% 12% 16% 16% 16% 15%
Tax 500 600 477 487 411 758 943 1,275 1,281 1,547 1,695
Net profit 1,282 2,232 1,928 2,378 2,118 2,109 2,386 3,160 3,377 3,697 3,622
% Growth YOY 74% -14% 23% -11% 0% 13% 32% 7% 9%
Net Profit Margin 10% 14% 10% 10% 9% 8% 9% 11% 12% 11% 11%
EPS 64.2 111.8 96.5 119.1 106.1 105.6 119.5 158.3 169.1 185.1 181.3
% Growth YOY 74% -14% 23% -11% 0% 13% 32% 7% 9%
Price to earning 17.0 17.4 17.8 17.7 14.3 21.0 20.7 18.8 19.1 20.2 15.1
Price 1,093 1,941 1,714 2,107 1,517 2,222 2,476 2,980 3,231 3,732 2,736
Dividend Payout 31.2% 98.4% 108.8% 37.8% 56.6% 61.5% 50.2% 45.5% 50.3% 51.3%
Market Cap 21,819 38,768 34,222 42,080 30,296 44,362 49,436 59,515 64,524 74,530
Retained Earnings 882 35 -169 1,479 920 811 1,187 1,722 1,680 1,800
Buffett's $1 Test 5.1

TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS

Sales Growth 11.3% 7.5% 6.3% 5.3%
PBT Growth 12.7% 11.8% 15.7% 16.4%
PBT Margin 13.9% 13.5% 14.3% 16.1%
Price to Earning 18.4 18.8 20.0 19.4

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
HERO MOTOCORP LTD
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Total
Cash from Operating Activity (CFO) 1,359 2,687 2,254 2,360 1,890 2,963 2,250 3,849 4,028 3,981 27,621
% Growth YoY 98% -16% 5% -20% 57% -24% 71% 5% -1%
Cash from Investing Activity -861 -528 -1,322 93 -733 -1,617 12 -2,206 -1,944 -1,915 -11,022
Cash from Financing Activity -500 -2,109 -955 -2,458 -1,056 -1,415 -2,231 -1,687 -2,096 -2,047 -16,553
Net Cash Flow -2 49 -23 -6 101 -69 32 -44 -12 19 46
CFO/Sales 11% 17% 12% 10% 8% 12% 8% 14% 14% 12%
CFO/Net Profit 106% 120% 117% 99% 89% 141% 94% 122% 119% 108%
Capex** 375 315 212 364 565 607 937 1156 1638 1238
FCF 984 2,372 2,043 1,996 1,325 2,356 1,313 2,693 2,390 2,743 20,215
Average FCF (3 Years) 2,609
FCF Growth YoY 141% -14% -2% -34% 78% -44% 105% -11% 15%
FCF/Sales 8% 15% 11% 8% 6% 9% 5% 9% 8% 9%
FCF/Net Profit 77% 106% 106% 84% 63% 112% 55% 85% 71% 74%

** 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
 Key Ratios
HERO MOTOCORP LTD
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Sales Growth 27.9% 23.1% 21.6% 0.8% 6.3% 9.1% 3.1% 0.2%
PBT Growth 59.0% -15.1% 19.1% -11.7% 13.4% 16.1% 33.2% 5.0%
Net Profit Growth 74.1% -13.6% 23.4% -10.9% -0.4% 13.1% 32.5% 6.9%
Dividend Growth 450.0% -4.5% -57.1% 33.3% 8.3% -7.7% 20.0% 18.1%
Operating Cash Flow Growth 97.7% -16.1% 4.7% -19.9% 56.8% -24.1% 71.1% 4.6%
Free Cash Flow Growth 141.0% -13.9% -2.3% -33.6% 77.8% -44.3% 105.1% -11.3%

Operating Margin 13.7% 16.9% 13.1% 15.3% 13.8% 14.0% 12.3% 15.7% 16.3%
PBT Margin 14.5% 18.0% 12.4% 12.1% 10.6% 11.3% 12.1% 15.6% 16.3%
Net Margin 10.4% 14.2% 9.9% 10.1% 8.9% 8.3% 8.6% 11.1% 11.8%

Debtor Days 4.4 2.5 2.5 4.2 10.2 13.3 18.4 16.5 20.0
Inventory Turnover 37.7 36.1 37.0 34.9 37.3 37.7 33.8 42.3 43.4
Fixed Asset Turnover 7.8 9.5 4.8 6.2 7.7 11.3 9.5 7.9 6.5
Debt/Equity 0.0 0.0 0.2 0.2 0.1 0.1 - - -
Debt/Assets 1.3% 0.8% 6.5% 7.3% 6.6% 2.8% 0.0% 0.0% 0.0%
Interest Coverage (Times) 705.1 1,349.4 159.5 135.5 213.4 243.6 301.2 907.9 771.0
Return on Equity 33.7% 64.4% 65.2% 55.4% 42.3% 37.7% 36.5% 35.8% 33.4%
Return on Capital Employed 46.0% 80.3% 66.3% 57.6% 45.0% 48.9% 51.1% 50.3% 46.1%
Free Cash Flow (Rs Cr) 984 2,372 2,043 1,996 1,325 2,356 1,313 2,693 2,390
Mar/18
13.1%
12.6%
9.5%
11.8%
-1.2%
14.8%

16.4%
16.3%
11.5%

17.2
39.1
6.9
-
0.0%
840.1
31.4%
44.6%
2,743
 HERO MOTOCORP LTD. FINANCIAL ANALYSIS-SET
Revenue Growth and Revenue Share
FY16 FY17 FY18 FY19 FY20
Hero Moto 25,275 27,585 28,443 28,500 32,230
Growth (YoY) #REF! 9% 3% 0% 13%
% of Industry 47% 47% 46% 46% 44% Hero maintains the higest revenu
Bajaj Auto 20,158 21,614 22,587 21,767 25,165 the industry. However, TVS has
Growth (YoY) #REF! 7% 4% -4% 16% gradual increase over years, and
% of Industry 38% 36% 36% 35% 35% of Hero as Bajaj has maintained
TVS 7,966 10,042 11,105 12,135 15,130
Growth (YoY) #REF! 26% 11% 9% 25%
% of Industry 15% 17% 18% 19% 21%

Profit (PBT) Growth and PBT Share

FY116 FY17 FY18 FY19 FY20
Hero Moto 2,867 3,329 4,435 4,658 5,244 Hero, which had had lost on on
Growth (YoY) #REF! 16% 33% 5% 13% share in the middle years, has
% of Industry 37% 43% 41% 43% 44% some of its losses in the last fe
Bajaj Auto 4,590 4,023 5,662 5,565 5,909 Bajaj, which saw its profit share
Growth (YoY) #REF! -12% 41% -2% 6% initial years, has given away so
but still holds the higest profi
% of Industry 59% 52% 53% 51% 49%
Suggests it is the most profitable
TVS 353 456 629 699 879 out of the three. TVS has seen
Growth (YoY) #REF! 29% 38% 11% 26% increase here too, but remains
% of Industry 5% 6% 6% 6% 7% third.

PBT Margin
FY16 FY17 FY18 FY19 FY20
Hero Moto 11% 12% 16% 16% 16%
Change #REF! 1% 4% 1% 0% It's Bajaj all the way
Bajaj Auto 23% 19% 25% 26% 23% premium nature of its b
Hero's and TVS's. T
Change #REF! -4% 6% 1% -2%
superlative growth, ha
TVS 4% 5% 6% 6% 6% improve much on the
Change #REF! 0% 1% 0% 0%

Key Ratios Comparison

FY16 FY17 FY18 FY19 FY20
Operating Margin
Hero 14% 12% 16% 16% 16%
Bajaj 20% 18% 21% 20% 19%
TVS 6% 6% 7% 7% 7%
PBT Margin
Hero 11% 12% 16% 16% 16%
Bajaj 23% 19% 25% 26% 23%
TVS 4% 5% 6% 6% 6%
Net Margin
Hero 8% 9% 11% 12% 11%
Bajaj 16% 13% 18% 19% 17%
TVS 3% 3% 4% 5% 4%
Debtor Days
Hero 13 18 16 20 17
Bajaj 14 12 12 16 22
TVS 15 18 19 22 23
Inventory Turnover
Hero 38 34 42 43 39
Bajaj 31 27 31 30 34
TVS 15 12 16 13 16
Fixed Asset Turnover
Hero 11.3 9.5 7.9 6.5 6.9
Bajaj 7.6 8.8 11.2 10.9 13.4
TVS 7.1 7.6 6.5 6.1 6.4
Debt/Equity
Hero 0.1 - - - -
Bajaj 0.0 0.0 0.0 0.0 0.0
TVS 0.4 0.6 0.5 0.5 0.4
Return on Equity
Hero 38% 36% 36% 33% 31%
Bajaj 31% 25% 29% 23% 21%
TVS 18% 21% 25% 23% 23%
Return on Capital Employed
Hero 51% 50% 46% 45%
Bajaj 36% 40% 31% 29%
TVS 18% 24% 21% 23%
L ANALYSIS-SETU GUPTA

maintains the higest revenue share of

ndustry. However, TVS has shown a
al increase over years, and at the cost
ro as Bajaj has maintained its share.

, which had had lost on on the profit

e in the middle years, has recouped
e of its losses in the last few years.
which saw its profit share jump in the
years, has given away some of tht,
t still holds the higest profit share.
ests it is the most profitable company
f the three. TVS has seen a gradual
ase here too, but remains the distant
third.

It's Bajaj all the way, thanks to the

premium nature of its bikes compared to
Hero's and TVS's. TVS, despite the
superlative growth, has not managed to
improve much on the profitability front.
 Profit Margin Capital Allocatio
20% 100%
15% 80%
10% 60%
5% 40%

0% 20%
9 0 1 2 3 4 5 6 7 8 0%
/0 /1 n/1 n/1 n/1 n/1 n/1 n/1 n/1 /1
n n n
Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja 09 / 10 1
/1 n/1
2
/ 13
n/ n n n n
Ja Ja Ja Ja Ja Ja
Operating Margin PBT Margin
Net Margin ROE R

Revenue Over Time Revenue and Pro

35,000 80%
30,000 60%
25,000
40%
20,000
20%
15,000
10,000 0%
1 2 3 4
5,000 -20% /10 n/
1 1 1 1
a n a a n/ a n/ a n/
- J J J J J
1 2 3 4 5 6 7
/ 0 9 / 10 /1 n/1 n/1 n/1 n/1 n/1 n/1 /1
8
Revenue Growth
n n a n n
Ja Ja J Ja Ja Ja Ja Ja Ja Ja Net Profit Growth

Profit Over Time

6,000
5,000
4,000
3,000
2,000
1,000
-
1 2 13 14 15 / 16 17 / 18
/ 0 9 / 10 /1 n/1 / / / /
n n n n n n n n n
Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja

PBT Net Profit

Data for Charts
Margins
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Operating Margin 14% 17% 13% 15% 14% 14% 12% 16% 16% 16%
PBT Margin 14% 18% 12% 12% 11% 11% 12% 16% 16% 16%
Net Margin 10% 14% 10% 10% 9% 8% 9% 11% 12% 11%

Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
ROE 34% 64% 65% 55% 42% 38% 36% 36% 33% 31%
ROCE 46% 80% 66% 58% 45% 49% 51% 50% 46% 45%

Revenue & Profit Growth

Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Revenue Growth 28% 23% 22% 1% 6% 9% 3% 0% 13%
PBT Growth 59% -15% 19% -12% 13% 16% 33% 5% 13%
Net Profit Growth 74% -14% 23% -11% 0% 13% 32% 7% 9%

Revenue & Profit

Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Revenue 12,319 15,758 19,398 23,579 23,768 25,275 27,585 28,443 28,500 32,230
PBT 1,781 2,832 2,405 2,865 2,529 2,867 3,329 4,435 4,658 5,244
Net Profit 1,282 2,232 1,928 2,378 2,118 2,109 2,386 3,160 3,377 3,697
 Capital Allocation Quality

0 1 2 3 4 5 6 7 8
/1 n/1 n/1 n/1 n/1 n/1 n/1 n/1 n/1
n
a Ja Ja Ja Ja Ja Ja Ja Ja

ROE ROCE

Revenue and Profit Growth

1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8
a n/ a n/ a n/ a n/ a n/ a n/ a n/ a n/
J J J J J J J J

Revenue Growth PBT Growth

Net Profit Growth
COMPANY NAME HERO MOTOCORP LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CH
CURRENT VERSION 2.10

META
Number of shares 19.97
Face Value 2
Current Price 2735.85
Market Capitalization 54642.28

PROFIT & LOSS

Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Sales 12319.12 15758.18 19397.93 23579.03 23768.11 25275.47
Raw Material Cost 8,760.22 10,730.41 14,135.17 17,365.41 17,364.86 18,221.53
Change in Inventory 18.21 -5.95 24.06 83.84 -32.80 -8.36
Power and Fuel 73.7 81.05 100.47 112.66 129.18 137.46
Other Mfr. Exp 113.33 143.49 164.83 187.56 213.96 232.61
Employee Cost 370.71 437.83 618.95 735.52 820.92 930.04
Selling and admin 1047.27 1401.46 1396.59 1155.37 1392.12 1591.85
Other Expenses 287.75 296.02 473.29 487.57 529.79 613.56
Other Income 280.3 363.33 289.62 364.57 398.38 446.38
Depreciation 180.66 191.47 402.38 1097.34 1141.75 1107.37
Interest 2.53 2.1 15.17 21.3 11.91 11.82
Profit before tax 1781.46 2831.73 2404.76 2864.71 2529.2 2867.25
Tax 499.7 599.9 476.86 486.58 411.04 758.17
Net profit 1281.76 2231.83 1927.9 2378.13 2118.16 2109.08
Dividend Amount 399.4 2196.7 2096.85 898.65 1198.2 1298.05

Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 7796.28 6364.6 6922.8 7980.5 8371.74 7314.21
Expenses 6427.41 5284.86 5965.24 6684.59 6916.04 6156.22
Other Income 152.36 131.93 118.23 131.7 117.6 110.02
Depreciation 119.25 124.85 135.3 132.95 136.03 138.28
Interest 1.55 1.52 1.48 1.58 1.56 1.57
Profit before tax 1400.43 1085.3 939.01 1293.08 1435.71 1128.16
Tax 396.21 313.25 221.26 379.04 425.22 322.73
Net profit 1004.22 772.05 717.75 914.04 1010.49 805.43
Operating Profit 1368.87 1079.74 957.56 1295.91 1455.7 1157.99

BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 39.94 39.94 39.94 39.94 39.94 39.94
Reserves 3760.81 3425.08 2916.12 4249.89 4966.3 5559.93
Borrowings 78.49 66.03 693.35 719.44 641.58 284.26
Other Liabilities 2205.9 4992.04 7082.8 4886.14 4001.16 4217.97
Total 6085.14 8523.09 10732.21 9895.41 9648.98 10102.1
Net Block 1573.71 1658.78 4080.28 3785.51 3070.98 2243.25
Capital Work in Progress 120.54 48.14 49.96 38.84 62.09 854.11
Investments 3368.75 3,925.71 5128.75 3964.26 3623.83 4088.77
Other Assets 1022.14 2890.46 1473.22 2106.8 2892.08 2915.97
Total 6085.14 8523.09 10732.21 9895.41 9648.98 10102.1
Receivables 149.94 108.39 130.59 272.31 665 920.58
Inventory 326.83 436.40 524.93 675.57 636.76 669.55
Cash & Bank 219.57 1907.21 71.52 76.82 181.04 117.5
No. of Equity Shares 199687500 199687500 199687500 199687500 199687500 199687500
New Bonus Shares
Face value 2 2 2 2 2 2

CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 1359.03 2686.64 2254.16 2359.78 1890.43 2963.41
Cash from Investing Activity -861.19 -528.17 -1322.31 92.79 -732.94 -1617.02
Cash from Financing Activity -499.93 -2109.31 -955.23 -2458.16 -1056.27 -1414.93
Net Cash Flow -2.09 49.16 -23.38 -5.59 101.22 -68.54

PRICE: 1092.661111 1941.4571 1713.8026 2107.2825 1517.1525 2221.5579

DERIVED:
Adjusted Equity Shares in Cr 19.97 19.97 19.97 19.97 19.97 19.97
DO NOT MAKE ANY CHANGES TO THIS SHEET

Mar-15 Mar-16 Mar-17 Mar-18

27585.3 28442.7 28500.46 32230.49
19,783.88 19,321.72 18,974.11 21,857.79
29.97 11.88 -63.17 23.15
158.47 122.13 112.62 138.77
245.4 209.85 204.61 240.32
1172.87 1315.93 1396.01 1540.13
1930.63 2006.56 2077.3 2159.1
936.88 1023.42 1037.83 1037.34
492.74 422.43 522.43 525.82
539.97 437.64 492.73 555.6
11.09 4.89 6.05 6.25
3328.82 4434.87 4658.46 5244.16
943.18 1274.68 1281.34 1546.8
2385.64 3160.19 3377.12 3697.36
1198.2 1437.84 1697.45 1897.15

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

8564.04 8809.82 9090.94 7864.82
7193.45 7432.53 7712.23 6760.05
166.5 115.73 223.66 187.64
148.34 148.17 151.78 151.83
1.54 2.11 2.14 2.16
1387.21 1342.74 1448.45 1138.42
419.81 433.57 472.17 369.32
967.4 909.17 976.28 769.1
1370.59 1377.29 1378.71 1104.77

Mar-15 Mar-16 Mar-17 Mar-18

 39.94 39.94 39.94 39.94
6501.39 8794.47 10071.35 11728.94

3986.68 3796.17 4645.42 5035.94

10528.01 12630.58 14756.71 16804.82
2912.69 3584.35 4395.59 4654.54
712.55 605.4 465.05 318.39
3154.11 4581.02 5889.85 7525.2
3748.66 3859.81 4006.22 4306.69
10528.01 12630.58 14756.71 16804.82
1389.59 1282.8 1561.87 1520.18
815.49 672.98 656.31 823.58
159.25 131.36 136.73 141.34
199687500 199690088 199696838 199696838

2 2 2 2

Mar-15 Mar-16 Mar-17 Mar-18

2250 3849.14 4028.02 3980.85
12.08 -2206.19 -1943.94 -1915.22
-2230.52 -1686.69 -2095.63 -2046.66
31.56 -43.74 -11.55 18.97

2475.67 2980.37368 3231.11316 3732.16429

19.97 19.97 19.97 19.97

 Common Size P&L
Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw Material Cost 71% 68% 73% 74% 73% 72% 72% 68% 67% 68%
Change in Inventory 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Power and Fuel 1% 1% 1% 0% 1% 1% 1% 0% 0% 0%
Other Mfr. Exp 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Employee Cost 3% 3% 3% 3% 3% 4% 4% 5% 5% 5%
Selling and Admin Cost 9% 9% 7% 5% 6% 6% 7% 7% 7% 7%
Other Expenses 2% 2% 2% 2% 2% 2% 3% 4% 4% 3%
Operating Profit 13% 17% 13% 15% 14% 14% 12% 16% 17% 16%
Other Income 2% 2% 1% 2% 2% 2% 2% 1% 2% 2%
Depreciation 1% 1% 2% 5% 5% 4% 2% 2% 2% 2%
Interest 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Profit Before Tax 14% 18% 12% 12% 11% 11% 12% 16% 16% 16%
Tax 4% 4% 2% 2% 2% 3% 3% 4% 4% 5%
Net Profit 10% 14% 10% 10% 9% 8% 9% 11% 12% 11%
Dividend Amount 3% 14% 11% 4% 5% 5% 4% 5% 6% 6%

Common Size Balance Sheet

Rs Cr Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Equity Share Capital 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Reserves 62% 40% 27% 43% 51% 55% 62% 70% 68% 70%
Borrowings 1% 1% 6% 7% 7% 3% 0% 0% 0% 0%
Other Liabilities 36% 59% 66% 49% 41% 42% 38% 30% 31% 30%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 26% 19% 38% 38% 32% 22% 28% 28% 30% 28%
Capital Work in Progress 2% 1% 0% 0% 1% 8% 7% 5% 3% 2%
Investments 55% 46% 48% 40% 38% 40% 30% 36% 40% 45%
Other Assets 17% 34% 14% 21% 30% 29% 36% 31% 27% 26%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 2% 1% 1% 3% 7% 9% 13% 10% 11% 9%
Inventory 5% 5% 5% 7% 7% 7% 8% 5% 4% 5%
Cash & Bank 4% 22% 1% 1% 2% 1% 2% 1% 1% 1%
 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

HERO MOTOCORP LTD HERO MOTOCORP 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) 4,618 Year 1-3 15% 0 Excess Cash (Latest)
1 FY18 3,000 2,679 Year 4-6 10% 1 FY18
2 FY19 3,450 2,750 Year 7-10 5% 2 FY19
3 FY20 3,967 2,824 Discount Rate 12% 3 FY20
4 FY21 4,364 2,774 4 FY21
5 FY22 4,801 2,724 Last 5-Years' CAGR 5 FY22
6 FY23 5,281 2,675 Sales 6% 6 FY23
7 FY24 5,545 2,508 PBT 16% 7 FY24
8 FY25 5,822 2,351 FCF 16% 8 FY25
9 FY26 6,113 2,204 9 FY26
10 FY27 6,419 2,067 10 FY27
10 64,187 20,667 10
Intrinsic Value 50,841 Intrinsic Value
Current Mkt. Cap. 54,642 Current Mkt. Cap.
Premium/(Discount) to IV 7% 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

HERO MOTOCORP 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%
3,130 2,795 Year 4-6 15%
3,756 2,995 Year 7-10 10%
4,508 3,209 Discount Rate 12%
5,184 3,294
5,962 3,383
6,856 3,473
7,541 3,411
8,295 3,350
9,125 3,291
10,038 3,232
150,563 48,477
Intrinsic Value 85,528
Current Mkt. Cap. 54,642
Premium/(Discount) to IV -36%

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 HERO MOTOCORP LTD Company Name
Year Ended Mar/18 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 2,945.9 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 5.9 Long-Term Growth Rate

Ben Graham Value (Rs Crore) 59,759 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 54,642 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)
HERO MOTOCORP LTD
Mar/18

2,945.9
8.5
11.8

94,479
54,642

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.
 Dicounted Cash Flow Valuation
HERO MOTOCORP LTD

Initial Cash Flow (Rs Cr) 2,609 59,384

54,642
Years 1-5 6-10 109%
FCF Growth Rate 15% 12%
Discount Rate 12%
Terminal Growth Rate 2%

Net Debt Level (Rs Cr) (4,618)

Year FCF Growth Present Value

1 3,000 15% 2,679
2 3,450 15% 2,750
3 3,967 15% 2,824
4 4,563 15% 2,900
5 5,247 15% 2,977
6 5,877 12% 2,977
7 6,582 12% 2,977
8 7,372 12% 2,977
9 8,256 12% 2,977
10 9,247 12% 2,977

Final Calculations
Terminal Year 9,432
PV of Year 1-10 Cash Flows 29,016
Terminal Value 30,368
Total PV of Cash Flows 59,384
Current Market Cap (Rs Cr) 54,642

Note: See explanation of DCF here

Valuation
TD

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
HERO MOTOCORP LTD
Particulars Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15
Net Profit (Rs Crore) 1,282 2,232 1,928 2,378 2,118 2,109 2,386
Net Profit Margin 10% 14% 10% 10% 9% 8% 9%
Return on Equity 34% 64% 65% 55% 42% 38% 36%

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) 11,483
Current P/E (x) 14.8
Exit P/E in the 10th year from now (x, Estimated) 20.0
Esti. Market Cap (10th year from now; Rs Cr) 229,669
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 73,947
Current Market Cap (Rs Cr) 54,642

Note: See explanation of this model here

el
Mar/16 Mar/17 Mar/18 CAGR (9-Yr) CAGR (5-Yr)
3,160 3,377 3,697 12% 12%
11% 12% 11%
36% 33% 31%
 Intrinsic Value Range
HERO MOTOCORP LTD
Lower Higher Remember! Give importance to a stock's valuations / fair
Dhandho 50,841 85,528 only "after" you have answered in "Yes" to these two ques
Ben Graham 59,759 94,479 (1) Is this business simple to be understood? and (2) Ca
DCF 59,384 understand this business?
Expected Return 73,947
Don't try to quantify everything. In stock research, the less
Current Market Cap. 54,642 mathematical you are, the more simple, sensible, and usef
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.
HERO MOTOCORP LTD
SCREENER.IN
Narration Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18
Sales 7,796 6,365 6,923 7,981 8,372 7,314 8,564 8,810 9,091 7,865
% Growth YOY 7% 15% 24% 10% 9% 8%
Expenses 6,427 5,285 5,965 6,685 6,916 6,156 7,193 7,433 7,712 6,760
Operating Profit 1,369 1,080 958 1,296 1,456 1,158 1,371 1,377 1,379 1,105
Other Income 152 132 118 132 118 110 167 116 224 188
Depreciation 119 125 135 133 136 138 148 148 152 152
Interest 2 2 1 2 2 2 2 2 2 2
Profit before tax 1,400 1,085 939 1,293 1,436 1,128 1,387 1,343 1,448 1,138
PBT Margin 18% 17% 14% 16% 17% 15% 16% 15% 16% 14%
% Growth YOY 3% 4% 48% 4% 1% 1%
Tax 396 313 221 379 425 323 420 434 472 369
Net profit 1,004 772 718 914 1,010 805 967 909 976 769
% Growth YOY 1% 4% 35% -1% -3% -5%
OPM 18% 17% 14% 16% 17% 16% 16% 16% 15% 14%
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