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/re
Step 2 - After creating your account, while you are logged in to Screener.in website, visit this page - https://www.screener.in/ex
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 wi

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"
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 - [email protected] - 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 wonder
a deadly weapon if you wish to
Analysis Excel (Ver. 4.0) careful of what you are getting
garbage out. And if you need the
a given stock, you mu
www.safalniveshak.com
Basic Company Details
Parameters Details
Company AARTI INDUSTRIES LTD
Current Stock Price (Rs) 1,623 Remember! Focus on decisions
Face Value (Rs) 5.0 evidence
No. of Shares (Crore) 8.7
Market Capitalization (Rs Crore) 14,068

Key Financials - Trend

Parameters Details
Sales Growth (9-Year CAGR) 11.2% Please! It's your money. Please
cause you to lose it all! I've desi
Profit Before Tax Growth (9-Year CAGR) 14.7% but you alone are responsible f
Net Profit Growth (8-Year CAGR) 15.8% ever after! I am not a sadist w
Average Debt/Equity (5-Years, x) 1.3 analyzing companies on your
instead of a map, for you can c
Average Return on Equity (5-Years) 21.4%
A
Average P/E (5-Years, x) 19.0
Latest P/E (x) 32.8
 Excel can be a wonderful tool to analyze the past. But it can be
y weapon if you wish to use it to predict the future! So be very
of what you are getting into. Here, garbage in will always equal
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.

er! Focus on decisions, not outcomes. Look for disconfirming

evidence. Calculate. Pray!

It's your money. Please don't blame me if results of this excel

u to lose it all! I've designed this excel to aid your own thinking,
alone are responsible for your actions. I want to live peacefully
fter! I am not a sadist who wants you to do the hard work by
ng companies on your own. But I'd rather give you a compass
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
AARTI INDUSTRIES 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 36 38 38 40 40 44 44 42 41 41
Reserves 303 360 405 473 632 734 864 1,052 1,269 1,475
Borrowings 483 436 526 625 846 1,037 1,201 1,275 1,545 2,047
Other Liabilities 224 326 354 432 558 751 711 468 487 558
Total 1,046 1,161 1,323 1,570 2,075 2,567 2,820 2,837 3,343 4,119

Net Block 367 382 392 433 664 793 936 1,170 1,567 1,844
Capital Work in Progress 9 9 18 54 62 113 188 307 267 431
Investments 15 15 19 21 19 32 63 56 62 56
Other Assets 656 755 894 1,061 1,330 1,629 1,632 1,304 1,448 1,788
Total 1,046 1,161 1,323 1,570 2,075 2,567 2,820 2,837 3,343 4,119

Working Capital 432 429 540 629 773 878 922 837 960 1,230
Debtors 267 256 333 407 429 466 467 523 547 639
Inventory 201 264 294 326 462 603 544 474 547 687
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 68 73 85 89 75 65 60 65 66 63
Inventory Turnover 7 5 5 5 5 4 5 6 6 5
Fixed Asset Turnover 3.9 3.4 3.6 3.8 3.1 3.3 3.0 2.5 1.9 2.0
Debt/Equity 1.4 1.1 1.2 1.2 1.3 1.3 1.3 1.2 1.2 1.4
Return on Equity 25% 18% 15% 17% 20% 19% 21% 23% 23% 21%
Return on Capital Employed 25% 19% 15% 17% 18% 18% 18% 19% 17% 15%
 Profit & Loss Account / Income Statement
AARTI INDUSTRIES 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 1,424 1,279 1,427 1,667 2,086 2,619 2,853 2,934 3,050 3,699 4,676
% Growth YOY -10% 12% 17% 25% 26% 9% 3% 4% 21%
Expenses 1,190 1,078 1,233 1,422 1,730 2,223 2,396 2,403 2,442 3,043 3,818
Material Cost (% of Sales) 60% 60% 62% 67% 57% 60% 56% 55% 54% 57% Check for wide fluctuations in key
Power and Fuel 7% 8% 7% 3% 7% 6% 7% 3% 4% 3% expense items. For manufacturing
Other Mfr. Exp 9% 11% 10% 8% 12% 11% 12% 12% 13% 13% firms, check their material costs etc. For
Employee Cost 2% 2% 3% 3% 3% 3% 3% 4% 5% 5% services firms, look at employee costs.
Selling and Admin Cost 6% 6% 6% 7% 7% 7% 7% 6% 6% 6%
Operating Profit 234 201 194 245 356 395 456 530 608 657 857
Operating Profit Margin 16% 16% 14% 15% 17% 15% 16% 18% 20% 18% 18%
Other Income 9 3 4 3 4 10 5 10 3 2 5
Other Income as % of Sales 0.6% 0.3% 0.3% 0.2% 0.2% 0.4% 0.2% 0.3% 0.1% 0.1% 0.1%
Depreciation 39 45 48 54 82 87 79 93 115 136 154
Interest 89 52 56 72 95 118 137 116 117 131 176
Interest Coverage(Times) 2 3 3 3 3 3 3 4 4 4 4
Profit before tax (PBT) 114 107 94 122 184 201 246 331 379 392 532
% Growth YOY -6% -13% 30% 51% 9% 22% 35% 14% 4%
PBT Margin 8% 8% 7% 7% 9% 8% 9% 11% 12% 11% 11%
Tax 30 37 27 35 53 52 58 79 72 76 102
Net profit 84 70 67 87 131 149 188 252 307 316 430
% Growth YOY -17% -5% 31% 51% 13% 26% 34% 21% 3%
Net Profit Margin 6% 5% 5% 5% 6% 6% 7% 9% 10% 9% 9%
EPS 11.6 9.1 8.7 11.0 16.6 16.8 21.2 30.3 37.3 38.9 49.6
% Growth YOY -21% -5% 27% 51% 1% 26% 43% 23% 4%
Price to earning 2.8 5.4 6.1 6.0 5.1 7.6 16.2 17.4 21.4 32.2 32.8
Price 33 49 53 66 85 127 344 528 800 1,254 1,623
Dividend Payout 25.9% 27.4% 28.7% 31.8% 24.1% 26.8% 25.9% 28.1% 2.7% 2.6%
Market Cap 241 376 409 525 670 1,123 3,048 4,400 6,567 10,191
Retained Earnings 63 51 48 59 100 109 139 182 298 308
Buffett's $1 Test 7.3

TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS

Sales Growth 11.2% 14.6% 12.1% 9.0%
PBT Growth 14.7% 22.7% 16.4% 16.9%
PBT Margin 9.0% 9.5% 10.1% 11.4%
Price to Earning 12.0 15.1 19.0 23.7

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
AARTI INDUSTRIES 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) 149 176 41 119 217 292 357 550 411 312 2,624
% Growth YoY 18% -77% 190% 81% 35% 22% 54% -25% -24%
Cash from Investing Activity -66 -60 -67 -131 -219 -271 -323 -424 -470 -574 -2,604
Cash from Financing Activity -87 -111 22 12 3 -19 -20 -128 57 264 -6
Net Cash Flow -4 5 -4 1 1 3 14 -2 -3 2 14
CFO/Sales 10% 14% 3% 7% 10% 11% 13% 19% 13% 8%
CFO/Net Profit 176% 251% 62% 137% 165% 197% 190% 218% 134% 99%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF -166 -36 -323 -446 -390 -645 -799 -1,088 -827 -512 -5,232
Average FCF (3 Years) -809
FCF Growth YoY -79% 803% 38% -12% 65% 24% 36% -24% -38%
FCF/Sales -12% -3% -23% -27% -19% -25% -28% -37% -27% -14%
FCF/Net Profit -197% -51% -483% -511% -297% -434% -425% -431% -270% -162%

** 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
AARTI INDUSTRIES LTD
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Sales Growth -10.2% 11.5% 16.8% 25.2% 25.6% 8.9% 2.8% 4.0%
PBT Growth -5.7% -12.9% 30.3% 50.7% 9.3% 22.3% 34.8% 14.3%
Net Profit Growth -17.0% -4.7% 30.6% 50.6% 13.2% 26.3% 34.4% 21.5%
Dividend Growth -12.2% 0.0% 44.4% 14.3% 26.0% 22.2% 45.3% -88.4%
Operating Cash Flow Growth 18.2% -76.5% 189.5% 81.4% 34.8% 22.1% 54.0% -25.3%
Free Cash Flow Growth -78.5% 803.4% 38.0% -12.4% 65.2% 23.9% 36.2% -24.0%

Operating Margin 16.4% 15.7% 13.6% 14.7% 17.1% 15.1% 16.0% 18.1% 19.9%
PBT Margin 8.0% 8.4% 6.6% 7.3% 8.8% 7.7% 8.6% 11.3% 12.4%
Net Margin 5.9% 5.5% 4.7% 5.2% 6.3% 5.7% 6.6% 8.6% 10.1%

Debtor Days 68.3 73.2 85.1 89.1 75.0 64.9 59.7 65.0 65.5
Inventory Turnover 7.1 4.9 4.9 5.1 4.5 4.3 5.2 6.2 5.6
Fixed Asset Turnover 3.9 3.4 3.6 3.8 3.1 3.3 3.0 2.5 1.9
Debt/Equity 1.4 1.1 1.2 1.2 1.3 1.3 1.3 1.2 1.2
Debt/Assets 46.1% 37.6% 39.8% 39.8% 40.8% 40.4% 42.6% 45.0% 46.2%
Interest Coverage (Times) 2.3 3.1 2.7 2.7 2.9 2.7 2.8 3.9 4.2
Return on Equity 24.9% 17.6% 15.1% 17.0% 19.5% 19.1% 20.7% 23.1% 23.4%
Return on Capital Employed 24.7% 19.1% 15.4% 17.0% 18.4% 17.5% 18.2% 18.9% 17.4%
Free Cash Flow (Rs Cr) -166 -36 -323 -446 -390 -645 -799 -1,088 -827
Mar/18
21.3%
3.6%
3.2%
-1.0%
-24.0%
-38.1%

17.8%
10.6%
8.6%

63.1
5.4
2.0
1.4
49.7%
4.0
20.9%
14.7%
-512
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 Alloc
30%
Check for a rising trend and
20% 25% Numbers > 20% long term a
has zero/marginal debt. Com
20%
15%
15%
10%
10%
5% Check for a rising trend and/or consistency. 5%
Compare with a close competitor
0% 0%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Jan/09 Jan/11 Jan

Operating Margin PBT Margin

Net Margin ROE

4,000
Revenue Revenue and Pro
60%
Check for a rising trend. Check for a ris
3,500 50% Compare grow
3,000 40%
2,500 30%
2,000 20%
10%
1,500
0%
1,000
-10% Jan/10 Jan/12
500 -20%
- -30%
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17 Revenue Growth
Net Profit Grow

500 Profit Over Time Operating and

1,000 Check
Check for a rising trend. for positive numbe
which are rising over tim
400 500
300 -
Jan/09 Jan/11 Ja
200 -500
100 -1,000
- -1,500
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17

PBT Net Profit Operating Cash Flo

Data for Charts (Please don't touch any number below)
Margins
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Margin 16% 16% 14% 15% 17% 15% 16% 18% 20%
PBT Margin 8% 8% 7% 7% 9% 8% 9% 11% 12%
Net Margin 6% 5% 5% 5% 6% 6% 7% 9% 10%

Management Effectiveness
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
ROE 25% 18% 15% 17% 20% 19% 21% 23% 23%
ROCE 25% 19% 15% 17% 18% 18% 18% 19% 17%

Revenue & Profit Growth

Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Revenue Growth -10% 12% 17% 25% 26% 9% 3% 4% 21%
PBT Growth -6% -13% 30% 51% 9% 22% 35% 14% 4%
Net Profit Growth -17% -5% 31% 51% 13% 26% 34% 21% 3%

Revenue & Profit

Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Revenue 1,424 1,279 1,427 1,667 2,086 2,619 2,853 2,934 3,050
PBT 114 107 94 122 184 201 246 331 379
Net Profit 84 70 67 87 131 149 188 252 307

Cash Flows
Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Operating Cash Flow 149 176 41 119 217 292 357 550 411
Free Cash Flow -166 -36 -323 -446 -390 -645 -799 -1,088 -827
%
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 and Profit Growth (YoY)

Check for a rising trend and/or low volatility.
% Compare growth rates with a close competitor.
%
%
%
%
%
% Jan/10 Jan/12 Jan/14 Jan/16 Jan/18
%
%
Revenue Growth PBT Growth
Net Profit Growth

Operating and Free Cash Flow

0 Check for positive numbers and
which are rising over time.
0
-
Jan/09 Jan/11 Jan/13 Jan/15 Jan/17
0
0
0

Operating Cash Flow Free Cash Flow

Mar/18
18%
11%
9%

Mar/18
21%
15%

Mar/18
3,699
392
316

Mar/18
312
-512
 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 60% 60% 62% 67% 57% 60% 56% 55% 54% 57%
Change in Inventory 0% 3% 1% 1% 3% 2% -1% -2% 1% 2%
Power and Fuel 7% 8% 7% 3% 7% 6% 7% 3% 4% 3%
Other Mfr. Exp 9% 11% 10% 8% 12% 11% 12% 12% 13% 13%
Employee Cost 2% 2% 3% 3% 3% 3% 3% 4% 5% 5%
Selling and Admin Cost 6% 6% 6% 7% 7% 7% 7% 6% 6% 6%
Other Expenses 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Operating Profit 17% 11% 11% 12% 10% 10% 17% 22% 18% 14%
Other Income 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Depreciation 3% 3% 3% 3% 4% 3% 3% 3% 4% 4%
Interest 6% 4% 4% 4% 5% 4% 5% 4% 4% 4%
Profit Before Tax 8% 8% 7% 7% 9% 8% 9% 11% 12% 11%
Tax 2% 3% 2% 2% 3% 2% 2% 3% 2% 2%
Net Profit 6% 5% 5% 5% 6% 6% 7% 9% 10% 9%
Dividend Amount 2% 1% 1% 2% 2% 2% 2% 2% 0% 0%

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 3% 3% 3% 3% 2% 2% 2% 1% 1% 1%
Reserves 29% 31% 31% 30% 30% 29% 31% 37% 38% 36%
Borrowings 46% 38% 40% 40% 41% 40% 43% 45% 46% 50%
Other Liabilities 21% 28% 27% 28% 27% 29% 25% 16% 15% 14%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 35% 33% 30% 28% 32% 31% 33% 41% 47% 45%
Capital Work in Progress 1% 1% 1% 3% 3% 4% 7% 11% 8% 10%
Investments 1% 1% 1% 1% 1% 1% 2% 2% 2% 1%
Other Assets 63% 65% 68% 68% 64% 63% 58% 46% 43% 43%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 25% 22% 25% 26% 21% 18% 17% 18% 16% 16%
Inventory 19% 23% 22% 21% 22% 24% 19% 17% 16% 17%
Cash & Bank 1% 1% 1% 1% 0% 0% 1% 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

AARTI INDUSTRIES LTD AARTI INDUSTRIES 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 (931) (831) Year 4-6 10% 1 FY18
2 FY19 (1,070) (853) Year 7-10 5% 2 FY19
3 FY20 (1,231) (876) Discount Rate 12% 3 FY20
4 FY21 (1,354) (860) 4 FY21
5 FY22 (1,489) (845) Last 5-Years' CAGR 5 FY22
6 FY23 (1,638) (830) Sales 12% 6 FY23
7 FY24 (1,720) (778) PBT 16% 7 FY24
8 FY25 (1,806) (729) FCF 6% 8 FY25
9 FY26 (1,896) (684) 9 FY26
10 FY27 (1,991) (641) 10 FY27
10 -19,910 (6,410) 10
Intrinsic Value (8,509) Intrinsic Value
Current Mkt. Cap. 14,068 Current Mkt. Cap.
Premium/(Discount) to IV -265% 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
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

AARTI INDUSTRIES 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%
(971) (867) Year 4-6 15%
(1,165) (929) Year 7-10 10%
(1,398) (995) Discount Rate 12%
(1,608) (1,022)
(1,849) (1,049)
(2,127) (1,077)
(2,339) (1,058)
(2,573) (1,039)
(2,830) (1,021)
(3,114) (1,002)
(46,703) (15,037)
Intrinsic Value (19,269)
Current Mkt. Cap. 14,068
Premium/(Discount) to IV -173%

ust use a normalized positive FCF as the

al year, without capex. Check the history of
sting the model to fit your version of reality.
 Ben Graham Formula (Low Range) Ben Graham Formula (High Range)
Company Name AARTI INDUSTRIES LTD Company Name
Year Ended Mar/18 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 242.4 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 9.6 Long-Term Growth Rate

Ben Graham Value (Rs Crore) 6,722 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 14,068 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)
AARTI INDUSTRIES LTD
Mar/18

242.4
8.5
19.2

11,383
14,068

g is the growth rate for the next 7-10 years

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
AARTI INDUSTRIES LTD

Initial Cash Flow (Rs Cr) (809) ###

14,068
Years 1-5 6-10 -131%
FCF Growth Rate 15% 12%
Discount Rate 12%
Terminal Growth Rate 2%

Net Debt Level (Rs Cr) (3,782)

Year FCF Growth Present Value

1 (931) 15% (831)
2 (1,070) 15% (853)
3 (1,231) 15% (876)
4 (1,415) 15% (899)
5 (1,628) 15% (924)
6 (1,823) 12% (924)
7 (2,042) 12% (924)
8 (2,287) 12% (924)
9 (2,561) 12% (924)
10 (2,868) 12% (924)

Final Calculations
Terminal Year (2,926)
PV of Year 1-10 Cash Flows (9,000)
Terminal Value (9,420)
Total PV of Cash Flows ###
Current Market Cap (Rs Cr) 14,068

Note: See explanation of DCF here

Valuation
LTD

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
AARTI INDUSTRIES LTD
Particulars Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15
Net Profit (Rs Crore) 84 70 67 87 131 149 188
Net Profit Margin 6% 5% 5% 5% 6% 6% 7%
Return on Equity 25% 18% 15% 17% 20% 19% 21%

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) 983
Current P/E (x) 44.5
Exit P/E in the 10th year from now (x, Estimated) 20.0
Esti. Market Cap (10th year from now; Rs Cr) 19,656
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 6,329
Current Market Cap (Rs Cr) 14,068

Note: See explanation of this model here

el
Mar/16 Mar/17 Mar/18 CAGR (9-Yr) CAGR (5-Yr)
252 307 316 16% 19%
9% 10% 9%
23% 23% 21%
 Intrinsic Value Range
AARTI INDUSTRIES LTD
Lower Higher Remember! Give importance to a stock's valuations / fair v
Dhandho -8,509 ### only "after" you have answered in "Yes" to these two quest
Ben Graham 6,722 11,383 (1) Is this business simple to be understood? and (2) Ca
DCF -18,420 understand this business?
Expected Return 6,329
Don't try to quantify everything. In stock research, the less
Current Market Cap. 14,068 mathematical you are, the more simple, sensible, and usefu
be your analysis and results. Great analysis is generally "b
of-the-envelope".
Explanation: Considering the above
range, we can say that Hero Moto's IV Also, your calculated "fair value" will be proven wrong in
range is between Rs 55,000 crore to Rs future, so don't invest your savings just because you fall in
95,000 crore. It's a big range, but that's with it. Don't look for perfection. It is overrated. Focus o
fine (who is looking for precision?). Now, decisions, not outcomes. Look for disconfirming eviden
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 -
ness 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
and 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.
AARTI INDUSTRIES 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 710 770 834 792 888 990 1,029 1,078 1,300 1,268
% Growth YOY 25% 29% 23% 36% 46% 28%
Expenses 559 620 682 653 728 812 849 891 1,057 1,021
Operating Profit 151 150 153 138 160 178 180 188 242 247
Other Income 0 1 1 0 0 1 1 3 0 0
Depreciation 28 29 31 32 33 34 37 38 39 41
Interest 29 31 31 29 31 34 36 46 51 42
Profit before tax 95 91 92 78 96 111 108 107 152 164
PBT Margin 13% 12% 11% 10% 11% 11% 11% 10% 12% 13%
% Growth YOY 2% 22% 17% 39% 58% 48%
Tax 19 17 18 15 18 21 23 18 29 32
Net profit 76 74 74 63 79 90 85 89 123 133
% Growth YOY 3% 22% 14% 42% 57% 47%
OPM 21% 20% 18% 17% 18% 18% 18% 17% 19% 19%
COMPANY NAME AARTI INDUSTRIES LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CHA
CURRENT VERSION 2.10

META
Number of shares 8.67
Face Value 5
Current Price 1623.2
Market Capitalization 14068.05

PROFIT & LOSS

Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Sales 1423.89 1279.03 1426.63 1666.56 2085.89 2618.92
Raw Material Cost 851.73 766.94 889.18 1119.24 1194.52 1567.1
Change in Inventory -4.23 32.85 16.33 23.54 71.07 62.05
Power and Fuel 95.62 98.41 98.89 45.99 153.45 166.31
Other Mfr. Exp 123.78 137.62 136.75 126.27 240.8 293.57
Employee Cost 27.92 31.75 35.67 45.52 63.61 75.73
Selling and admin 84.4 76.05 91.95 111.22 153.19 191.12
Other Expenses 2.7 0.43 -2.98 -2.79 -4.85 -8.35
Other Income 8.57 3.25 3.99 2.84 4.4 10.42
Depreciation 38.71 44.75 47.92 53.97 81.8 87.44
Interest 89.36 51.71 55.96 71.51 95 117.53
Profit before tax 114.01 107.47 93.61 122.01 183.84 200.94
Tax 29.55 37.36 26.83 34.82 52.5 52.25
Net profit 84.46 70.11 66.78 87.19 131.34 148.7
Dividend Amount 21.84 19.18 19.18 27.69 31.65 39.87

Quarters
Report Date Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17
Sales 710.25 770.23 834.35 791.81 887.89 990.22
Expenses 559.31 620 681.75 653.42 727.61 812.41
Other Income 0.18 1.01 0.96 0.09 0.11 0.78
Depreciation 27.64 29.48 30.88 31.69 33 34.2
Interest 28.98 30.92 30.5 29.24 31.38 33.7
Profit before tax 94.5 90.84 92.18 77.55 96.01 110.69
Tax 18.5 17 17.85 14.5 17.5 20.5
Net profit 76 73.84 74.33 63.05 78.51 90.19
Operating Profit 150.94 150.23 152.6 138.39 160.28 177.81

BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 36.4 38.36 38.36 39.56 39.56 44.3
Reserves 303.45 360.3 404.67 473.09 632.35 734.4
Borrowings 482.57 436.48 526.1 624.59 845.82 1037.42
Other Liabilities 223.89 325.95 353.88 432.45 557.6 750.78
Total 1046.31 1161.09 1323.01 1569.69 2075.33 2566.9
Net Block 366.76 381.66 391.98 433.24 664.23 793.29
Capital Work in Progress 8.55 9.15 18.45 54.42 62.01 112.61
Investments 15.28 15.25 18.76 21.07 18.6 32.25
Other Assets 655.72 755.03 893.82 1060.96 1330.49 1628.75
Total 1046.31 1161.09 1323.01 1569.69 2075.33 2566.9
Receivables 266.57 256.45 332.53 406.95 428.65 465.77
Inventory 200.94 263.54 294.09 325.85 462.12 603.33
Cash & Bank 6.03 11.41 7.77 8.81 9.71 12.35
No. of Equity Shares 72809424 76720073 76720073 79120073 79120073 88591687
New Bonus Shares
Face value 5 5 5 5 5 5

CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 148.71 175.83 41.26 119.46 216.73 292.25
Cash from Investing Activity -65.89 -59.69 -67.27 -130.9 -218.57 -270.93
Cash from Financing Activity -86.79 -110.75 22.37 12.48 2.74 -18.68
Net Cash Flow -3.97 5.39 -3.64 1.04 0.9 2.64

PRICE: 33.058333 49.007143 53.352632 66.3175 84.715 126.81316

DERIVED:
Adjusted Equity Shares in Cr 7.28 7.67 7.67 7.91 7.91 8.86
DO NOT MAKE ANY CHANGES TO THIS SHEET

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

2852.83 2933.63 3050.22 3699.31
1588.42 1610.37 1635.94 2113.54
-17.22 -54.28 30.07 69.74
186.15 97.99 109.18 118.78
331.78 342.8 400.41 466.88
89.71 110.39 140.17 176.8
196.63 175.64 178.77 227.45
-13.56 11.96 7.41 8.87
5.45 9.64 2.51 2.13
78.65 92.69 114.8 135.77
137.48 115.9 117.38 130.74
245.8 331.25 378.74 392.35
58 78.82 72.06 75.91
187.8 252.43 306.68 316.44
48.73 70.82 8.21 8.13

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

1029.39 1078.48 1299.52 1268.15
849.14 890.58 1057.43 1021.28
1.16 3.4 0.24 0.24
36.88 37.72 38.85 40.61
36.42 46.1 51.31 42.35
108.11 107.48 152.17 164.15
23.41 18.2 29.25 31.5
84.7 89.28 122.92 132.65
180.25 187.9 242.09 246.87

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

 44.3 41.66 41.06 40.65
863.54 1052.03 1269.03 1474.52
1201.1 1275.38 1545.31 2046.53
710.7 467.59 487.42 557.79
2819.64 2836.66 3342.82 4119.49
936.09 1169.7 1566.57 1844.28
187.95 306.76 266.79 431.18
63.24 55.99 61.7 55.9
1632.36 1304.21 1447.76 1788.13
2819.64 2836.66 3342.82 4119.49
466.82 522.81 547.37 639.23
543.87 474.24 546.59 686.75
26.33 24.16 21.64 23.93
88591687 83320383 82120383 81300000

5 5 5 5

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

356.97 549.77 410.81 312.05
-322.69 -424.14 -470.03 -573.59
-20.3 -127.8 56.7 263.83
13.98 -2.17 -2.52 2.29

344.0175 528.052632 799.739474 1253.56667

8.86 8.33 8.21 8.13

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