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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"
figures, which you must update manually from the company's annual reports. Don’t forget to make these changes as these num
3. You may update the sheet and add your own analysis, formulae etc. and then upload again to Screener.in site using the Step
"Data 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 (j
the 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.
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 126 243 349 393 435 526 1,351 1,289 1,222 1,117
Capital Work in Progress 21 10 26 95 319 792 74 55 33 27
Investments 9 9 - - - - - - - -
Other Assets 500 1,019 1,438 1,725 2,073 2,744 2,845 2,433 2,728 2,773
Total 656 1,281 1,813 2,214 2,828 4,062 4,270 3,777 3,983 3,918
Working Capital 229 604 722 755 758 999 1,337 1,121 1,122 1,067
Debtors 136 258 531 625 682 860 930 1,042 1,069 1,092
Inventory 201 350 622 746 895 1,146 991 808 920 1,019
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 44 68 63 65 63 71 72 80 77 71
Inventory Turnover 6 4 5 5 4 4 5 6 6 5
Fixed Asset Turnover 8.9 5.7 8.8 8.9 9.1 8.4 3.5 3.7 4.2 5.0
Debt/Equity - - 0.1 0.2 0.3 0.9 1.4 1.2 1.2 0.6
Return on Equity 18% 11% 12% 10% 8% 2% -6% -3% -1% 18%
Return on Capital Employed 28% 18% 15% 13% 11% 5% 1% 5% 5% 17%
Profit & Loss Account / Income Statement
BASF INDIA 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 1,117 1,382 3,064 3,516 3,941 4,430 4,706 4,749 5,073 5,583 6,051
% Growth YOY 24% 122% 15% 12% 12% 6% 1% 7% 10%
Expenses 1,001 1,216 2,884 3,306 3,720 4,244 4,579 4,643 4,804 5,262 5,801
Material Cost (% of Sales) 66% 65% 76% 71% 72% 73% 72% 71% 71% 72% Check for wide fluctuations in key
Power and Fuel 2% 2% 1% 1% 1% 2% 2% 2% 2% 2% expense items. For manufacturing
Other Mfr. Exp 4% 3% 2% 2% 2% 2% 3% 1% 3% 3% firms, check their material costs etc. For
Employee Cost 8% 8% 7% 7% 8% 8% 7% 7% 6% 6% services firms, look at employee costs.
Selling and Admin Cost 12% 12% 10% 11% 11% 11% 10% 12% 10% 11%
Operating Profit 115 166 180 210 220 186 126 106 270 322 250
Operating Profit Margin 10% 12% 6% 6% 6% 4% 3% 2% 5% 6% 4%
Other Income 9 12 26 5 4 -2 39 175 29 206 45
Other Income as % of Sales 0.8% 0.9% 0.8% 0.1% 0.1% -0.1% 0.8% 3.7% 0.6% 3.7% 0.8%
Depreciation 15 26 46 52 60 71 142 163 169 153 149
Interest 1 1 9 14 17 16 96 148 142 113 92
Interest Coverage(Times) 73 181 17 12 10 7 0 1 1 3 2
Profit before tax (PBT) 108 151 151 150 147 97 -72 -30 -12 261 55
% Growth YOY 40% 0% -1% -2% -34% -175% -58% -59% -2193%
PBT Margin 10% 11% 5% 4% 4% 2% -2% -1% 0% 5% 1%
Tax 39 54 33 49 55 66 1 - 2 15 -7
Net profit 69 97 118 101 92 30 -74 -30 -14 247 61
% Growth YOY 41% 22% -14% -9% -67% -342% -59% -53% -1845%
Net Profit Margin 6% 7% 4% 3% 2% 1% -2% -1% 0% 4% 1%
EPS 24.3 23.7 27.2 23.3 21.2 7.0 -17.0 -7.0 -3.3 56.9 14.2
% Growth YOY -2% 15% -14% -9% -67% -342% -59% -53% -1845%
Price to earning 8.4 16.6 23.6 25.0 27.1 114.9 -68.1 -125.6 -403.6 35.4 98.3
Price 205 394 642 583 576 805 1,156 881 1,317 2,018 1,396
Dividend Payout 28.7% 33.7% 29.4% 17.2% 15.2% 13.5% 0.0% 0.0% 0.0% 5.3%
Market Cap 577 1,605 2,778 2,525 2,492 3,485 5,005 3,812 5,702 8,734
Retained Earnings 49 64 83 84 78 26 -74 -30 -14 234
Buffett's $1 Test 16.3
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
BASF INDIA 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) 119 51 156 182 233 8 -96 199 221 290 1,362
% Growth YoY -57% 209% 16% 28% -97% -1346% -306% 11% 31%
Cash from Investing Activity -75 109 -52 -178 -383 -597 -163 199 -66 158 -1,047
Cash from Financing Activity -25 -24 -250 12 132 588 372 -425 -133 -465 -217
Net Cash Flow 20 136 -145 15 -18 -0 113 -27 22 -16 98
CFO/Sales 11% 4% 5% 5% 6% 0% -2% 4% 4% 5%
CFO/Net Profit 174% 52% 133% 180% 254% 25% 131% -655% -1565% 118%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -196 -161 -208 -383 -374 -929 -1,252 -1,439 -1,017 -534 -6,494
Average FCF (3 Years) -997
FCF Growth YoY -18% 29% 85% -3% 149% 35% 15% -29% -47%
FCF/Sales -18% -12% -7% -11% -9% -21% -27% -30% -20% -10%
FCF/Net Profit -285% -166% -176% -380% -328% -727% 1872% 4739% 7197% -217%
Operating Margin 10.3% 12.0% 5.9% 6.0% 5.6% 4.2% 2.7% 2.2% 5.3%
PBT Margin 9.7% 10.9% 4.9% 4.3% 3.7% 2.2% -1.5% -0.6% -0.2%
Net Margin 6.1% 7.0% 3.8% 2.9% 2.3% 0.7% -1.6% -0.6% -0.3%
Debtor Days 44.4 68.2 63.2 64.9 63.1 70.8 72.2 80.1 76.9
Inventory Turnover 5.6 4.0 4.9 4.7 4.4 3.9 4.7 5.9 5.5
Fixed Asset Turnover 8.9 5.7 8.8 8.9 9.1 8.4 3.5 3.7 4.2
Debt/Equity - - 0.1 0.2 0.3 0.9 1.4 1.2 1.2
Debt/Assets 0.0% 0.0% 7.1% 8.8% 13.1% 26.3% 37.5% 35.7% 32.0%
Interest Coverage (Times) 73.4 180.9 17.1 12.0 9.6 7.0 0.2 0.8 0.9
Return on Equity 17.8% 11.2% 12.2% 9.6% 8.0% 2.4% -6.3% -2.7% -1.3%
Return on Capital Employed 28.4% 17.6% 14.6% 13.1% 10.8% 4.9% 0.8% 4.8% 5.4%
Free Cash Flow (Rs Cr) -196 -161 -208 -383 -374 -929 -1,252 -1,439 -1,017
Mar/18
10.1%
###
###
200.0%
31.2%
-47.5%
5.8%
4.7%
4.4%
71.4
5.5
5.0
0.6
22.1%
3.3
18.3%
16.9%
-534
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
6,000
Revenue Revenue and Pro
500%
Check for a rising trend. Check for a ris
5,000 Compare grow
0%
Jan/10 Jan/12
4,000 -500%
3,000 -1000%
2,000 -1500%
1,000 -2000%
- -2500%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Revenue Growth
Net Profit Grow
Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
ROE 18% 11% 12% 10% 8% 2% -6% -3% -1%
ROCE 28% 18% 15% 13% 11% 5% 1% 5% 5%
Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow 119 51 156 182 233 8 -96 199 221
Free Cash Flow -196 -161 -208 -383 -374 -929 -1,252 -1,439 -1,017
%
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
%
ROE ROCE
%
Revenue Growth PBT Growth
Net Profit Growth
Mar/18
18%
17%
Mar/18
5,583
261
247
Mar/18
290
-534
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 66% 65% 76% 71% 72% 73% 72% 71% 71% 72%
Change in Inventory 2% 3% 4% 1% 2% 4% -1% -2% 0% 1%
Power and Fuel 2% 2% 1% 1% 1% 2% 2% 2% 2% 2%
Other Mfr. Exp 4% 3% 2% 2% 2% 2% 3% 1% 3% 3%
Employee Cost 8% 8% 7% 7% 8% 8% 7% 7% 6% 6%
Selling and Admin Cost 12% 12% 10% 11% 11% 11% 10% 12% 10% 11%
Other Expenses 1% 1% 2% 2% 2% 3% 2% 2% 2% 2%
Operating Profit 6% 5% -2% 5% 1% -3% 4% 6% 5% 4%
Other Income 1% 1% 1% 0% 0% 0% 1% 4% 1% 4%
Depreciation 1% 2% 2% 1% 2% 2% 3% 3% 3% 3%
Interest 0% 0% 0% 0% 0% 0% 2% 3% 3% 2%
Profit Before Tax 10% 11% 5% 4% 4% 4% -1% -1% 0% 5%
Tax 4% 4% 1% 1% 1% 2% 0% 0% 0% 0%
Net Profit 6% 7% 4% 3% 3% 3% -1% -1% 0% 4%
Dividend Amount 2% 2% 1% 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
starting number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the his
this business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of
Calculation
by Mohnish Pabrai
Avg 5-Yr Net Profit (Rs Crore) 31.8 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 10.9 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 963 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 6,043 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
31.8
8.5
21.8
1,656
6,043
e 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 nu
e present, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
Dicounted Cash Flow Valuation
BASF INDIA LTD
Final Calculations
Terminal Year (3,604)
PV of Year 1-10 Cash Flows ###
Terminal Value ###
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) 6,043
META
Number of shares 4.33
Face Value 10
Current Price 1395.85
Market Capitalization 6042.63
Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 1291.91 1122.49 1273.8 1510.14 1455.14 1278.74
Expenses 1239.32 1106.95 1152.06 1440.16 1365.02 1210.83
Other Income 0.73 19.17 1.89 0.3 158.34 11.67
Depreciation 41.76 43.13 40.86 39.18 40.13 37.11
Interest 29.29 38.81 40.22 30.42 34.62 21.05
Profit before tax -17.73 -47.23 42.55 0.68 173.71 21.42
Tax 1.66 0.8 14.5
Net profit -19.39 -47.23 42.55 0.68 172.91 6.92
Operating Profit 52.59 15.54 121.74 69.98 90.12 67.91
BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 28.19 40.77 43.29 43.29 43.29 43.29
Reserves 357.04 825 924.69 1005.43 1099.26 1206.88
Borrowings 129.36 195.27 370.44 1067.3
Other Liabilities 270.62 415.28 715.56 969.81 1314.78 1744.95
Total 655.85 1281.05 1812.9 2213.8 2827.77 4062.42
Net Block 125.94 243.31 349.05 393.2 435.4 526.08
Capital Work in Progress 21.15 9.52 26.11 95.34 319.32 792.14
Investments 9 9
Other Assets 499.76 1019.22 1437.74 1725.26 2073.05 2744.2
Total 655.85 1281.05 1812.9 2213.8 2827.77 4062.42
Receivables 135.69 258 530.9 624.85 681.53 859.76
Inventory 200.98 349.51 622.08 745.52 895.25 1146.01
Cash & Bank 27.7 163.84 18.45 33.91 15.55 15.06
No. of Equity Shares 28190148 40769987 43285640 43285640 43285640 43285640
New Bonus Shares
Face value 10 10 10 10 10 10
CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 119.18 50.68 156.35 181.62 233.22 7.73
Cash from Investing Activity -75.06 109.39 -52.13 -178.05 -383.31 -596.69
Cash from Financing Activity -24.58 -23.93 -249.71 11.89 131.76 588.47
Net Cash Flow 19.54 136.14 -145.49 15.46 -18.33 -0.49
DERIVED:
Adjusted Equity Shares in Cr 2.82 4.08 4.33 4.33 4.33 4.33
DO NOT MAKE ANY CHANGES TO THIS SHEET
10 10 10 10
TESTING:
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