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Remember! Focus on decisions, not o
Stock Analysis Tool disconfirming evidence. Calcu

KPI GREEN ENERGY LTD

Basic Company Details Sales Growth


Parameters Details PBT Growth
Current Stock Price (Rs) 839 NP Growth (8-Year CAGR)
Face Value (Rs) 10.0 Avg Debt/Equity
No. of Shares (Crore) 3.6 Avg. RoE
Market Capitalization (Rs Crore) 3,030 Avg. P/E
Current PE 28

Intrinsic Value Range DuPont Analysis


Lower Higher PBIT Margin
EPV 9,187 Interest Burden
Dhandho 1,701 2,978 Tax Burden
Ben Graham #DIV/0! #DIV/0! ROA
DCF 2,186 Leverage
Expected Return 4,284 ROE
Current Market Cap. 3,030

Explanation: If the current market cap is within the above IV range, Ratios
specially closer to lower range, it is reasonably /attractively priced. 45%
If above, then it can be considered overpriced. 40%
35%
30%
25%
20%
15%
10%
5%
0%
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-2

Cash Flow
250
200
150
100
50
-
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-
-50
r! Focus on decisions, not outcomes. Look for
sconfirming evidence. Calculate. Pray!
Annual Sales Sales Sales
700 180%
600
TRENDS OVER THE YEARS 500 125%
9 Yrs 7 Yrs 5 Yrs 3 Yrs Last Yr. 400
300 72% 73%
- - - 122% 180%
200
- - - 128% 139%
100
- - - 157% 154%
-
- - - 2.24 2.62 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
- - - 24% 43%
- - - 11.92 13.75
Profitability PBT NP
Linear (NP) Int
Linear (Int) OPM G%
160
uPont Analysis 140
29% 120
76% 24% 100
77% 23% 80
60
51% 40
5 20
43% -
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

ROE ROCE EPS & Dividend EPS Moving average (EPS)


35.0
30.0
25.0
20.0
15.0
10.0
5.0

Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 -


Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

CFO FCF FCF G Debt & Reserves Debt Linear (Debt)


Reserves Linear (Reserv
2 800
1 700
- 600
(1)
500
(2)
(3) 400
(4) 300
(5) 200
Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 (6) 100
(7) -
Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
Sales Sales G (%)

180% 2.00
1.80
1.60
125% 1.40
1.20
1.00
72% 73% 0.80
0.60
0.40
0.20
-
an-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

PBT NP
Linear (NP) Int
Linear (Int) OPM G%
60%

50%

40%

30%

20%

10%

0%
n-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

PS Moving average (EPS) Div %


100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
n-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23

Debt Linear (Debt)


Reserves Linear (Reserves)

an-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23


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.


Key Ratios
KPI GREEN ENERGY LTD

Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21


Sales Growth - - - - - 72% 73%
Expense Growth - - - - - 69% 37%
Sustainable Growth Rate - - - - - 9% 7% 18%
Gross Profit Growth - - - - - 103% 92%
PBT Growth - - - - - -7% 152%
Net Profit Growth - - - - - -28% 240%
Dividend Growth - - - - - - -
Dividend Payout Ratio 0% 0% 0% 0% 0% 0% 0% 0%

Price to Book - - - - - 1.0 0.3 0.5


Price to Sales - - - - - 3.7 0.7 0.9
Price to Earnings 14.3 6.7 4.0

Gross Margin - - - - - 52% 61% 67%


Operating Margin - - - - - 45% 46% 57%
PBT Margin - - - - - 37% 20% 29%
Net Margin - - - - - 26% 11% 21%

Debtor Days 0 0 0 0 0 143 175 178


Inventory Turnover 0 0 0 0 0 2 2 3
Fixed Asset Turnover - - - - - 0 0 0
Total Asset Turnover - - - - - 0.2 0.2 0.2
Debt/Equity - - - - - 0.4 1.4 2.0
Debt/Assets - - - - - 0.2 0.5 0.6
Interest Coverage Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 4 3 3
Return on Equity 9% 7% 18%
Return on Capital Employed 6% 6% 11%
Return on Invested Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1219% 1100% 716%

Free Cash Flow Rs Cr 4 6 14 0 6 -9 48 -25


Operating Cash Flow Growth - - - - - -334% -167%
Free Cash Flow Growth 50% 133% -100% - -251% -628% -152%
FCF/Sales - - - - - -26% 81% -24%
CFO/Total Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! -11% 13% -7%
CFO/Total Debt #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! -43% 29% -11%
Cash Interest Coverage #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 4 3 4
CFO/Capex 0.0 0.0 0.0 #DIV/0! 0.0 2.1 -5.0 13.4
Mar-22 Mar-23
125% 180%
176% 260%
27% 39%
96% 92%
98% 139%
97% 154%
- 469%
4% 9%

3.0 2.6
4.4 2.3
23.2 13.8

59% 40%
47% 32%
26% 22%
19% 17%

58 83
2 4
0 1
0.3 0.5
2.9 2.6
0.6 0.5
3 4
28% 43%
14% 16%
647% 530%

112 200
-483% 56%
-555% 78%
49% 31%
13% 13%
23% 24%
3 4
-10.2 -3.9
What to look for?
Higheris better but also look for/on tenn stabili
Lower is better but compare with sales growth. Growth Higher than sales growths
Higher is better as it indicates the effectiveness and efficiency with which the company is managing its operations
Higher is better but also look for Ion term stability and consistency
Higher is better but also look for Ion term stability and consistency
Higher is better but also look for Ion 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 Ion term stability and consistency, plus the nature of the industry. Also compare with industr
Higher is better but also look for Ion term stability and consistency, plus the nature of the industry. Also compare with industr
Higher is better but also look for Ion term stability and consistency, plus the nature of the industry. Also compare with industr
Higher is better but also look for Ion term stability and consistency, plus the nature of the industry. Also compare with industr

Lower/reducin is better. Compare with the industry.


Higher/risin is better. Compare with the industry.
Higher/'isin is better. Compare with the industry.

Nil / lower than 0.5 / reducing is better


Lower is better
Look for number > 5
Look for number > 20%. Also check ifthe debt is low/nil. Compare with the industry.
Look for number > 20%. Also check if the debt is low/nil. Compare with the industry.
Look for number > 20% Also check ifthe debt is low/nil. Compare with the industry.

Look for positjve and rising number. If the company consistent/ generates negative FCF over say 10 years. Avoid it.
Higher is better but also look for long term stability and consistency.
Higher is better but also look for long term stability and consistency.
The Higher the percentage the better as it shows how profitable the company is. Check for OCF growing in line with sales over
Higher \is better. Show how well the com an uses its assetsto enerateo eratjn cash flow
Higher and more than 100% is better. Shows the ability of the company to use its operating cash flows to pay off its debt
Indicates the company's ability to make interest payments on its entire debt. A high/ leveraged company will have a low multi
Measures the capital available for internal reinvestment and for payments on existing debt When this ratio exceeds 1.0 the co
over 10 years
Balance Sheet
KPI GREEN ENERGY LTD
Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Equity Share Capital - - - - - 18 18 18 18 36
Reserves - - - - - 81 80 102 136 222
Borrowings - - - - - 40 139 240 446 676
Other Liabilities - - - - - 22 61 49 177 322
Total - - - - - 161 298 409 777 1,255

Net Block - - - - - 84 213 244 482 801


Capital Work in Progress - - - - - 18 1 21 31 0
Investments - - - - - - - - - 2
Other Assets - - - - - 59 85 144 264 453
Total - - - - - 161 298 409 777 1,255

Working Capital - - - - - 36 23 95 87 131


Debtors - - - - - 13 28 50 37 147
Inventory - - - - - 15 35 40 107 165
Cash & Bank**
** 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

Key Ratio Mar-14 Mar-15 Mar-16 Mar-17


Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Debtor Days - - - - - 143 175 178 58 83
Inventory Turnover - - - - - 2 2 3 2 4
Fixed Asset Turnover - - - - - 0.4 0.3 0.4 0.5 0.8
Total Asset Turnover - - - - - 0.2 0.2 0.2 0.3 0.5
Debt/Equity - - - - - 0.4 1.4 2.0 2.9 2.6
Debt/Asset - - - - - 0.2 0.5 0.6 0.6 0.5
Return on Equity 9% 7% 18% 28% 43%
Return on Capital Employed 6% 6% 11% 14% 16%
Return on Invested Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1219% 1100% 716% 647% 530%
Profit & Loss Account / Income Statement
KPI GREEN ENERGY LTD TRENDS OVER THE YEARS
Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Trailing 9 Yrs 7 Yrs 5 Yrs 3 Yrs
Sales - - - - - 34 59 102 230 644 644 - - - 122%
% Growth YOY - - - - - 72% 73% 125% 180%
Expenses 0% - - - - 19 32 44 121 435 435 - - - 138%
Material Cost (% of Sales) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 41% 60%
Power and Fuel #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 30% 26% 22% 0% 0%
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 18% 13% 10% 0% 0%
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 4% 3% 2% 1%
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 15% 13% 9% 0% 0%
Gross Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 18 36 69 135 260 260 - - - 93%
Gross Profit Margin - - - - - 52% 61% 67% 59% 40% 40% 56% 56% 56% 57%
Operating Profit - - - - - 15 27 58 109 208 209 - - - 98%
Operating Profit Margin - - - - - 45% 46% 57% 47% 32% 32% 45% 45% 45% 46%
Other Income - - - - - 6 0 0 1 3 3
Other Income as % of Sales - - - - - 17.1% 0.4% 0.3% 0.6% 0.4% 0.4%
Depreciation - - - - - 4 7 13 14 23 23
Interest - - - - - 4 8 16 37 47 47
Interest Coverage(Times) - - - - - 4 3 3 3 4 4
Profit before tax (PBT) - - - - - 13 12 30 59 142 142 - - - 128%
% Growth YOY - - - - - -7% 152% 98% 139%
PBT Margin - - - - - 37% 20% 29% 26% 22% 22% 27% 27% 27% 24%
Tax - - - - - 4 5 8 16 32 32
Net profit - - - - - 9 6 22 43 110 110 - - - 157%
% Growth YOY - - - - - -28% 240% 97% 154%
Net Profit Margin - - - - - 26% 11% 21% 19% 17% 17% - - - 16%
EPS - - - - - 2.5 1.8 6.1 12.0 30.4 30.3 - - - 157%
% Growth YOY - - - - - -28% 240% 97% 154%
Price to earning 14.3 6.7 4.0 23.2 13.8 27.6 12.4 12.4 12.4 11.9
Price - - - - - 35 12 25 278 418 839
Dividend Payout 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 4.2% 9.4%
Market Cap - - - - - 127 43 88 1,004 1,508 - - - 2
Retained Earnings - - - - - 9 6 22 41 99
Buffett's $1 Test 8.5

Check for wide fluctuations in key expense items. For manufacturing firms, check their material costs etc. For services firms, look at
employee costs.
Common Size P&L
Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw Material Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 41% 60%
Change in Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 2% 1% 0% 0%
Power and Fuel #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 30% 26% 22% 0% 0%
Other Mfr. Exp #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 18% 13% 10% 0% 0%
Employee Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 3% 4% 3% 2% 1%
Selling and Admin Cost #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 15% 13% 9% 0% 0%
Other Expenses #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% -1% 10% 7%
Operating Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 22% 42% 55% 47% 32%
Other Income #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 17% 0% 0% 1% 0%
Depreciation #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 13% 13% 12% 6% 4%
Interest #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 13% 16% 16% 7%
Profit Before Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 37% 20% 29% 26% 22%
Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 9% 8% 7% 5%
Net Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 26% 11% 21% 19% 17%
Dividend Amount #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 1% 2%

Common Size Balance Sheet


Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Equity Share Capital #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 6% 4% 2% 3%
Reserves #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 50% 27% 25% 17% 18%
Borrowings #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 25% 47% 59% 57% 54%
Other Liabilities #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 14% 21% 12% 23% 26%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 52% 71% 60% 62% 64%
Capital Work in Progress #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 11% 0% 5% 4% 0%
Investments #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0% 0% 0% 0% 0%
Other Assets #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 36% 28% 35% 34% 36%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 8% 10% 12% 5% 12%
Inventory #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 10% 12% 10% 14% 13%
Cash & Bank #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! 1% 3% 5% 3% 4%
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.
Cash Flow Statement
KPI GREEN ENERGY LTD TRENDS OVER THE YEARS
Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Total 9 Yrs 7 Yrs 5 Yrs 3 Yrs
Cash from Operating Activity (CFO) - - - - - -17 40 -27 102 159 258 - - - 59%
% Growth YoY - - - - - -334% -167% -483% 56%
Cash from Investing Activity - - - - - -15 -119 -63 -189 -309 -696
Cash from Financing Activity - - - - - 33 87 101 91 177 489
Net Cash Flow - - - - - 1 8 11 4 27 51
CFO/Sales - - - - - -50% 67% -26% 45% 25%
CFO/Net Profit - - - - - -191% 619% -122% 237% 145%
Capex** -4 -6 -14 - -6 -8 -8 -2 -10 -41 30% 17% 47% 72%
FCF 4 6 14 - 6 -9 48 -25 112 200 357 54% 46% 102% 61%
% Growth YoY 50% 133% -100% - -251% -628% -152% -555% 78%
Average FCF (3 Years) 96
FCF/Sales - - - - - -26% 81% -24% 49% 31%
FCF/Net Profit - - - - - -102% 743% -113% 260% 183%

** 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
Earnings Power Value (Bruce Greenwald)
Read the book - Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald (EPV is explained
Explanation - Earnings power value (EPV) is a technique for valuing stocks by making an assumption about the sustainability
capital but assuming no further growth. EPV formula = Adjusted Earnings / Cost of Capital

Company Name KPI GREEN ENERGY LTD


Latest Year Ended Mar-23

Calculation of Normalized Earnings


(Rs Crore) Mar/19 Mar/20 Mar/21 Mar/22 Mar/23
Sales 34 59 102 230 644
EBIT 17 20 46 96 189
Less - Adjustment 0 0 0 0 1
EBIT (Adjusted) 17 20 46 96 188
EBIT Margin'(Adjusted) 48% 33% 45% 42% 29%
Tax Rate 31% 46% 27% 27% 23%
Earnings After Tax (Adjusted) 12 11 34 70 145
Depreciation 4 7 13 14 23
Maintenance Capex (See Table Below) -89 -66 -104 -311 -1,016
Earnings After Tax (Normalized, A) 105 85 150 395 1,184
Reported Profit After Tax (B) 9 6 22 43 110

EPV Process (as per Greenwald's book, slightly modified) -


1. Start with operating earnings, i.e. EBIT. Adjust any one-time charges. I deduct 0.5% of reported EBIT as this adjustment
2. Apply a tax rate to the adjusted EBIT. I use the actual tax rate calculated from the Income Statement. After reducing this tax,
3. Add back Depreciation
4. Subtract Maintenance Capex
5. After these four steps, you arrive at Normalized Earnings
6. Divide this Normalized Earnings number by the Discount Rate to arrive at EPV. I use 12% discount rate/cost of capital.
7. Note that Greenwald's process as per his book is slightly more detailed than what I have used here

Calculation of Maintenance Capex


(Rs Crore) Mar/19 Mar/20 Mar/21 Mar/22 Mar/23
Fixed Assets (PPE) 84 213 244 482 801
Net Sales 34 59 102 230 644
PPE/Sales 2.45 3.60 2.38 2.09 1.24
Change in Sales 34 25 43 128 414
Total Capex -8 -8 -2 -10 -41
Growth Capex 81 58 102 301 975
Maintenance Capex -89 -66 -104 -311 -1,016

Calculating Maintenance Capex, as per Greenwald's book -


1. Calculate the Average Gross Property Plant and Equipment (PPE) / Sales ratio over 5-7 years
2. Calculate current year’s increase in sales
3. Multiply PPE/Sales ratio by increase in sales to arrive at Growth Capex
4. Maintenance Capex = Total Capex figure from the cash flow statement minus Growth Capex calculated above
(Bruce Greenwald)
nd by Bruce Greenwald (EPV is explained Page 93 onwards)
ng an assumption about the sustainability of current earnings and the cost of
mula = Adjusted Earnings / Cost of Capital

EPV with Different Cost of Capital


Discount Rate EPV Net Cash** Total EPV Per Share
10% 11,835 -676 11,160 3,088
12% 9,863 -676 9,187 2,543
15% 7,890 -676 7,215 1,997
Current Market Cap (Rs Crore) 3,030
EPV as % of Market Cap 303%

** Change the "Cash & Bank" number in "Balance Sheet" sheet


(Row #19) so that the correct number automatically reflects here

% of reported EBIT as this adjustment


Income Statement. After reducing this tax, we arrive at Adjusted Earnings After Tax

se 12% discount rate/cost of capital.


I have used here

er 5-7 years

wth Capex calculated above


Dhandho Intrinsic Value Calculation
Read the book - The Dhandho Investor by Mohnish Pabrai

KPI GREEN ENERGY LTD KPI GREEN ENERGY LTD


Dhandho IV - Lower Range Dhandho IV - Higher Rang
Year FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth Year
0 Excess Cash (Latest) - Year 1-3 15% 0 Excess Cash (Latest)
1 FY18 110 99 Year 4-6 10% 1 FY18
2 FY19 127 101 Year 7-10 5% 2 FY19
3 FY20 146 104 Discount Rate 12% 3 FY20
4 FY21 161 102 4 FY21
5 FY22 177 100 Last 5-Years' CAGR 5 FY22
6 FY23 194 98 Sales #DIV/0! 6 FY23
7 FY24 204 92 PBT #DIV/0! 7 FY24
8 FY25 214 87 FCF 102% 8 FY25
9 FY26 225 81 9 FY26
10 FY27 236 76 10 FY27
10 2,363 761 10
Intrinsic Value 1,701 Intrinsic Value
Current Mkt. Cap. 3,030 Current Mkt. Cap.
Premium/(Discount) to IV 78% 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 t
number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the history of th
while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of realit
Calculation
by Mohnish Pabrai

KPI GREEN ENERGY LTD


Dhandho IV - Higher Range
FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth
Excess Cash (Latest) - Year 1-3 20%
115 103 Year 4-6 15%
138 110 Year 7-10 10%
166 118 Discount Rate 12%
191 121
219 125
252 128
278 126
305 123
336 121
369 119
5,542 1,784
Intrinsic Value 2,978
Current Mkt. Cap. 3,030
Premium/(Discount) to IV 2%

se a normalized positive FCF as the starting


out capex. Check the history of this business
e model to fit your version of reality.
Ben Graham Valuation
KPI GREEN ENERGY LTD

Low Range High Range


Year Ended Mar/23 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 38.0 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate #DIV/0! Long-Term Growth Rate

Ben Graham Value (Rs Crore) #DIV/0! Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 3,030 Current Market Cap (Rs Crore)
Value as % of Market Cap #DIV/0! Value as % of Market Cap

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
years

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
publicizing his works, the risk free interest rate was 4.4% but to adjust to the present, we divide this number by today’s AAA
corporate bond rate, represented by Y in the formula above.

Note: I have used Graham's original formula in the above calculations


High Range
Mar/23

38.0
8.5
#DIV/0!

#DIV/0!
3,030
#DIV/0!

is the growth rate for the next 7-10

of around 1962 when Graham was


ide this number by today’s AAA
Dicounted Cash Flow Valuation
KPI GREEN ENERGY LTD

Initial Cash Flow (Rs Cr) 96 2,186


3,030
Years 1-5 6-10 72%
FCF Growth Rate 15% 12%
Discount Rate 12%
Terminal Growth Rate 2%

Net Debt Level (Rs Cr) 676

Year FCF Growth Present Value


1 110 15% 99
2 127 15% 101
3 146 15% 104
4 168 15% 107
5 193 15% 110
6 216 12% 110
7 242 12% 110
8 271 12% 110
9 304 12% 110
10 340 12% 110

Note: See explanation of DCF here


Valuation
TD

DCF Value (As calculated in cell B29)


Current Market Cap
DCF as % of Current Mkt Cap

Final Calculations
Terminal Year 347
PV of Year 1-10 Cash Flows 1,068
Terminal Value 1,118
Total PV of Cash Flows 2,186
Current Market Cap (Rs Cr) 3,030
Expected Returns Model
KPI GREEN ENERGY LTD
Particulars Mar/14 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19 Mar/20
Net Profit (Rs Crore) - - - - - 9 6
Net Profit Margin - - - - - 26% 11%
Return on Equity 9% 7%

Calculations (Enter values only in black cells)


Estimated CAGR in Net Profit over next 10 years 15%
Estimated Net Profit after 10 years (Rs Cr) 444
Current P/E (x) 27.6
Exit P/E in the 10th year from now (x, Estimated) 30.0
Esti. Market Cap (10th year from now; Rs Cr) 13,305
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 4,284
Current Market Cap (Rs Cr) 3,030

Note: See explanation of this model here


l
Mar/21 Mar/22 Mar/23 CAGR (9-Yr) CAGR (5-Yr)
22 43 110 #DIV/0! #DIV/0!
21% 19% 17%
18% 28% 43%
KPI GREEN ENERGY LTD
SCREENER.IN
Narration Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
Sales 14 48 35 57 62 75 122 160 179 182
% Growth YOY 350% 56% 245% 178% 188% 144%
Expenses 3 18 15 34 33 39 80 107 120 128
Operating Profit 11 30 20 24 29 36 42 53 60 54
Other Income 0 0 0 0 0 1 0 0 0 2
Depreciation 4 5 5 2 3 4 5 6 6 6
Interest 6 8 7 8 9 14 11 11 12 13
Profit before tax 1 18 9 15 17 18 26 36 43 37
PBT Margin 7% 38% 26% 26% 27% 24% 21% 23% 24% 20%
% Growth YOY 1610% 1% 186% 143% 151% 101%
Tax 4 1 1 3 4 8 4 15 8 5
Net profit -3 17 8 12 13 10 22 21 34 32
% Growth YOY -566% -43% 178% 73% 162% 222%
OPM 77% 63% 58% 41% 47% 48% 34% 33% 33% 30%
COMPANY NAME KPI GREEN ENERGY LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CH
CURRENT VERSION 2.10

META
Number of shares 3.61
Face Value 10
Current Price 838.55
Market Capitalization 3030.02

PROFIT & LOSS


Report Date Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Sales 34.29
Raw Material Cost
Change in Inventory 3.85
Power and Fuel 10.4
Other Mfr. Exp 6.16
Employee Cost 1.05
Selling and admin 5.29
Other Expenses -0.08
Other Income 5.85
Depreciation 4.47
Interest 3.87
Profit before tax 12.83
Tax 3.92
Net profit 8.9
Dividend Amount

Quarters
Report Date Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22
Sales 13.82 48.04 35.42 57.43 62.2 74.89
Expenses 3.18 17.75 14.99 33.65 33.22 39.23
Other Income 0.05 0.15 0.28 0.3 0.2 0.72
Depreciation 4.16 4.65 4.58 1.57 3.45 4.47
Interest 5.54 7.60 6.96 7.57 8.80 13.60
Profit before tax 0.99 18.19 9.17 14.94 16.93 18.31
Tax 3.82 0.95 1.19 2.69 3.79 8.44
Net profit -2.82 17.25 7.99 12.26 13.14 9.86
Operating Profit 10.64 30.29 20.43 23.78 28.98 35.66

BALANCE SHEET
Report Date Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Equity Share Capital 18.07
Reserves 80.97
Borrowings 39.95
Other Liabilities 22.24
Total 161.23
Net Block 84.12
Capital Work in Progress 18.44
Investments
Other Assets 58.67
Total 161.23
Receivables 13.48
Inventory 15.40
Cash & Bank 1.99
No. of Equity Shares 18067000
New Bonus Shares
Face value 10

CASH FLOW:
Report Date Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Cash from Operating Activity -17.06
Cash from Investing Activity -15.14
Cash from Financing Activity 33.07
Net Cash Flow 0.87

PRICE: 35.23

DERIVED:
Adjusted Equity Shares in Cr 3.61
DO NOT MAKE ANY CHANGES TO THIS SHEET

Mar-20 Mar-21 Mar-22 Mar-23


59.12 102.28 229.94 643.79
94.80 384.13
0.97 0.82 0.70 2.18
15.35 22.82
7.84 10.61
2.14 2.59 4.26 8.07
7.71 9.32
0.02 -0.64 22.7 45.28
0.21 0.33 1.47 2.76
7.48 12.52 14.06 22.62
7.84 16.16 36.93 46.76
11.92 30.05 59.36 141.87
5.48 8.13 16.12 32.24
6.44 21.92 43.25 109.63
1.81 10.3

Jun-22 Sep-22 Dec-22 Mar-23


122.33 159.84 179.21 182.4
80.45 107.07 119.6 128.16
0.48 0.3 0.46 1.52
5.26 5.64 5.8 5.92
10.88 11.08 11.72 13.09
26.22 36.35 42.55 36.75
3.99 15.2 8.09 4.97
22.23 21.16 34.46 31.78
41.88 52.77 59.61 54.24

Mar-20 Mar-21 Mar-22 Mar-23


18.07 18.07 18.07 36.13
79.93 101.85 135.67 221.78
138.96 240.07 446.48 675.51
61.42 49.32 177.12 321.55
298.38 409.31 777.34 1254.97
212.99 243.84 481.59 800.63
0.86 21.02 31.33 0.28
1.5
84.53 144.45 264.42 452.56
298.38 409.31 777.34 1254.97
28.38 49.87 36.78 146.73
34.73 40.27 106.66 164.98
10.37 21.68 25.64 52.4
18067000 18067000

10 10 10 10

Mar-20 Mar-21 Mar-22 Mar-23


39.87 -26.7 102.38 159.38
-118.78 -63.11 -189.4 -309.43
87.3 101.13 90.98 176.8
8.39 11.31 3.96 26.76

11.93 24.5 278 417.6

3.61 3.61 3.61 3.61


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