Safal Niveshak Stock Analysis Excel (Ver. 3.

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. 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"
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.

Note: All data is sourced from Screener.in

 Safal Niveshak Stock
Analysis Excel (Ver. 3.0)
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 wonde
the past. But it can be a we
destruction to predict the future
of what you are getting into. He
always equal garba
Details
MEGHMANI ORGANICS LTD
74 Remember! Focus on decision
1.0 Look for disconfirming evidenc
25.4
1,874
Please! It's your money. Please
Details
results of this excel cause you
9.6% designed this excel to aid your
23.6% you alone are responsible for yo
18.5% live peacefully ever after! I am
0.9 wants you to do the hard wo
15.3% companies on your own. But I'd
8.3 compass instead of a map, for
map with territory and lose it
6.9
 Excel can be a wonderful tool to analyze
past. But it can be a weapon of mass
on to predict the future! So be very careful
you are getting into. Here, garbage in will
always equal garbage out.

ber! Focus on decisions, not outcomes.

disconfirming evidence. Calculate. Pray!

t's your money. Please don't blame me if

of this excel cause you to lose it all! I've
d this excel to aid your own thinking, but
are responsible for your actions. I want to
acefully ever after! I am not a sadist who
you to do the hard work by analyzing
es on your own. But I'd rather give you a
ss instead of a map, for you can confuse
ith 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
MEGHMANI ORGANICS 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 25 25 25 25 25 25 25 25 25 25
Reserves 403 442 469 451 477 493 526 606 693 845
Borrowings 569 639 715 763 717 754 644 578 461 386
Other Liabilities 266 284 301 298 355 406 358 330 406 562
Total 1,263 1,391 1,510 1,536 1,574 1,678 1,553 1,539 1,585 1,818

Net Block 199 641 654 656 623 689 781 735 778 795
Capital Work in Progress 418 44 56 86 165 126 23 92 19 103
Investments 41 19 36 20 25 1 24 1 29 72
Other Assets 604 687 764 775 761 862 725 711 759 848
Total 1,263 1,391 1,510 1,536 1,574 1,678 1,553 1,539 1,585 1,818

Working Capital 338 403 463 478 407 457 367 381 353 286
Debtors 283 316 344 333 339 352 317 327 331 375
Inventory 113 139 152 172 181 250 216 313 242 268
Cash & Bank** 15 24 55 - 161 172 112 186 311 281
** 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 131 141 120 114 117 109 89 90 85 76

Inventory Turnover 7 6 7 6 6 5 6 4 6 7
Fixed Asset Turnover 4.0 1.3 1.6 1.6 1.7 1.7 1.7 1.8 1.8 2.3
Debt/Equity 1.3 1.4 1.4 1.6 1.4 1.5 1.2 0.9 0.6 0.4
Return on Equity 9% 8% 6% 1% 6% 7% 8% 18% 16% 27%
Return on Capital Employed 7% 6% 7% 6% 8% 8% 10% 13% 14% 23%
 Profit & Loss Account / Income Statement
MEGHMANI ORGANICS 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 791 816 1,045 1,062 1,058 1,178 1,294 1,332 1,420 1,803 1,859
% Growth YOY 3% 28% 2% 0% 11% 10% 3% 7% 27%
Expenses 725 698 897 904 874 983 1,094 1,071 1,135 1,373 1,396
Material Cost (% of Sales) 69% 66% 63% 64% 60% 63% 57% 55% 51% 51% Check for wide fluctuations in key
Power and Fuel 5% 5% 6% 6% 7% 8% 8% 8% 7% 6% expense items. For manufacturing
Other Mfr. Exp 5% 4% 2% 4% 3% 7% 5% 7% 6% 6% firms, check their material costs etc. For
Employee Cost 2% 4% 4% 4% 4% 5% 5% 4% 4% 4% services firms, look at employee costs.
Selling and Admin Cost 7% 8% 1% 4% 4% 2% 6% 6% 2% 4%
Operating Profit 67 119 149 158 184 195 201 261 285 430 463
Operating Profit Margin 8% 15% 14% 15% 17% 17% 15% 20% 20% 24% 25%
Other Income 25 23 8 13 13 6 9 25 12 30 40
Other Income as % of Sales 3.2% 2.8% 0.8% 1.2% 1.3% 0.5% 0.7% 1.9% 0.9% 1.7% 2.2%
Depreciation 17 51 69 75 75 80 75 77 91 95 96
Interest 26 42 54 74 64 68 75 63 51 40 43
Interest Coverage(Times) 3 2 2 1 2 2 2 3 4 9 10
Profit before tax (PBT) 48 48 34 23 58 54 60 146 156 326 364
% Growth YOY 0% -29% -34% 157% -8% 12% 144% 6% 109%
PBT Margin 6% 6% 3% 2% 6% 5% 5% 11% 11% 18% 20%
Tax 11 9 4 19 30 18 14 35 40 88 92
Net profit 37 40 30 4 28 35 46 111 116 238 272
% Growth YOY 6% -25% -88% 704% 25% 30% 142% 4% 105%
Net Profit Margin 5% 5% 3% 0% 3% 3% 4% 8% 8% 13% 15%
EPS 1.5 1.6 1.2 0.1 1.1 1.4 1.8 4.4 4.6 9.4 10.7
% Growth YOY 6% -25% -88% 704% 25% 30% 142% 4% 105%
Price to earning 6.2 11.4 12.9 56.7 5.3 6.4 9.4 6.3 8.7 10.7 6.9
Price 9 18 15 8 6 9 17 27 40 100 74
Dividend Payout 22.6% 19.7% 26.8% 73.0% 14.8% 11.1% 23.2% 9.2% 11.6% 5.9%
Market Cap 229 451 383 199 151 228 431 697 1,013 2,534
Retained Earnings 29 32 22 1 24 32 35 101 103 224
Buffett's $1 Test 3.8

TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS

Sales Growth 9.6% 8.1% 11.2% 11.7%
PBT Growth 23.6% 38.0% 41.1% 75.8%
PBT Margin 7.2% 8.1% 9.8% 13.3%
Price to Earning 13.4 14.8 8.3 8.5

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.
 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 69% 66% 63% 64% 60% 63% 57% 55% 51% 51%
Change in Inventory 3% 0% -1% 3% 1% 5% -2% 2% -5% 0%
Power and Fuel 5% 5% 6% 6% 7% 8% 8% 8% 7% 6%
Other Mfr. Exp 5% 4% 2% 4% 3% 7% 5% 7% 6% 6%
Employee Cost 2% 4% 4% 4% 4% 5% 5% 4% 4% 4%
Selling and Admin Cost 7% 8% 1% 4% 4% 2% 6% 6% 2% 4%
Other Expenses 6% -1% 9% 6% 6% 3% 1% 3% 5% 6%
Operating Profit 3% 15% 16% 10% 15% 7% 19% 15% 29% 23%
Other Income 3% 3% 1% 1% 1% 1% 1% 2% 1% 2%
Depreciation 2% 6% 7% 7% 7% 7% 6% 6% 6% 5%
Interest 3% 5% 5% 7% 6% 6% 6% 5% 4% 2%
Profit Before Tax 6% 6% 3% 2% 6% 5% 5% 11% 11% 18%
Tax 1% 1% 0% 2% 3% 2% 1% 3% 3% 5%
Net Profit 5% 6% 4% 0% 2% 2% 3% 6% 6% 10%
Dividend Amount 1% 1% 1% 0% 0% 0% 1% 1% 1% 1%

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 2% 2% 2% 2% 2% 2% 2% 2% 2% 1%
Reserves 32% 32% 31% 29% 30% 29% 34% 39% 44% 46%
Borrowings 45% 46% 47% 50% 46% 45% 41% 38% 29% 21%
Other Liabilities 21% 20% 20% 19% 23% 24% 23% 21% 26% 31%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 16% 46% 43% 43% 40% 41% 50% 48% 49% 44%
Capital Work in Progress 33% 3% 4% 6% 10% 8% 1% 6% 1% 6%
Investments 3% 1% 2% 1% 2% 0% 2% 0% 2% 4%
Other Assets 48% 49% 51% 50% 48% 51% 47% 46% 48% 47%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 22% 23% 23% 22% 22% 21% 20% 21% 21% 21%
Inventory 9% 10% 10% 11% 12% 15% 14% 20% 15% 15%
Cash & Bank 2% 2% 1% 3% 1% 2% 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.
 Cash Flow Statement
MEGHMANI ORGANICS 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) 55 81 126 134 205 136 252 201 259 405 1,854
Cash from Investing Activity -313 -114 -119 -75 -94 -46 -59 -73 -96 -275 -1,263
Cash from Financing Activity 289 31 9 -50 -132 -60 -213 -134 -164 -128 -553
Net Cash Flow 30 -1 16 8 -21 30 -19 -6 -1 2 39
CFO/Sales 7% 10% 12% 13% 19% 12% 19% 15% 18% 22%
CFO/Net Profit 147% 206% 423% 3807% 724% 384% 549% 181% 223% 170%
Capex** 118 118 94 106 122 108 64 100 61 196
FCF -64 -37 32 28 83 29 189 101 198 209 768
Average FCF (3 Years) 169
FCF/Sales -8% -5% 3% 3% 8% 2% 15% 8% 14% 12%
FCF/Net Profit -172% -71% 84% 814% 482% 125% 430% 122% 226% 122%

** 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
(INR Crores/10 Millions) MEGHMANI ORGANICS LTD Jun-18 << Latest available quarterly results
Total 10 Yrs Growth
Narration Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Last 4 Quarters (2007-16) Trends: 10Yr 7Yr 5Yr 3Yr TTM
Sales 791 816 1,045 1,062 1,058 1,178 1,294 1,332 1,420 1,803 1,859 Sales Growth 10% 8% 11% 12% 3%
Operating Profit 67 119 149 158 184 195 201 261 285 430 463 OPM 17% 18% 19% 20% 25%
Operating Profit Margin (OPM%) 8% 15% 14% 15% 17% 17% 15% 20% 20% 24% 25% PAT Growth 19% 24% 58% 57% 59%
Other Income 25 23 8 13 13 6 9 25 12 30 40 Avg. PE 14.6 16.3 10.6 11.2 6.9
Interest 26 42 54 74 64 68 75 63 51 40 43
Profit before tax (PBT) 48 48 34 23 58 54 60 146 156 326 364
Tax% 23% 18% 13% 84% 51% 34% 23% 24% 25% 27% 25%
Net profit after tax (PAT) 37 52 38 3 17 23 44 83 88 171 272 556 CMP 74
Net Profit Margin (NPM%) 5% 6% 4% 0% 2% 2% 3% 6% 6% 10% 15% P/E 6.9
Cash from Operating Activity (CFO) 55 81 126 134 205 136 252 201 259 405 1,854 P/B 2.2
Capex (NFA+WIP change+Dep) 118 94 106 122 108 64 100 61 196 968 P/E*P/B 14.9
Total Debt (D) 569 639 715 763 717 754 644 578 461 386 FCF 886 Div Yield 0.5%
Cash + Investments (CI +NCI) 64 41 58 64 34 38 39 12 39 82 Total Div 10 Yrs 74 Market Cap 1,874
Cash+Investments 82
Self-Sustainable Growth Rate (SSGR) -6% -9% -10% -8% -5% -2% 2% 481 Total Retained Earnings (RE) in 10 Yrs (A)
PBT/Avg. NFA (<10%,>25%) 11% 5% 3% 9% 8% 8% 19% 21% 41% FCF/CFO 48% 1,645 Total increase in Mcap in 10 yrs (B)
ROE on Avg Equity (<7%,>25%) 12% 8% 1% 4% 4% 8% 14% 13% 22% SG to Capex 0.18 3.42 Value created per INR of RE (B/A)
ROCE (EBIT on Avg CE/TA) (<10%,>35%) 7% 6% 6% 8% 7% 8% 14% 13% 21%
Incremental ROE 3Yr Rolling -34% -49% -35% 113% 95% 50% 68%
0 Closing share price on March 31, 10 years back
Net Fixed Asset Turnover (High is better) 1.94 1.61 1.62 1.66 1.80 1.76 1.76 1.88 2.29
Receivables days (Low is better) 134 115 116 116 107 94 88 85 71
Inventory Turnover (High is better) 6 7 7 6 5 6 5 5 7
Net Fixed Assets (NFA) 199 641 654 656 623 689 781 735 778 795
Capital Work in Progress (CWIP) 418 44 56 86 165 126 23 92 19 103
Share Capital 25 25 25 25 25 25 25 25 25 25
Dividend Paid (Div) Without DDT 8 10 10 3 3 3 10 8 10 10 Div Growth 2% 0% 32% 0%
Dividend Payout (Div/PAT) 23% 20% 27% 73% 15% 11% 23% 9% 12% 6%
Retained Earnings (RE=PAT-Div) 29 42 28 1 15 20 34 75 78 161
Price to earning 6.2 8.7 10.1 57.3 8.7 10.0 9.8 8.4 11.6 14.8
Mcap 229 451 383 199 151 228 431 697 1,013 2,534 1,874
Cash + Investments (CI +NCI) 64 41 58 64 34 38 39 12 39 82 82

Total Debt (D) 569 639 715 763 717 754 644 578 461 386 Debt -4% -8% -12% -16%
Total Equity (E) 428 467 494 476 502 518 552 631 718 871 Book Value 8% 8% 12% 16%
Debt to Equity ratio (D/E) 1.3 1.4 1.4 1.6 1.4 1.5 1.2 0.9 0.6 0.4
Cost of funds 12.0%
Interest outgo (Rs. Cr.) 72 81 89 89 88 84 73 62 51
Interest Coverage (OP/Int. Out) 1.6 1.8 1.8 2.1 2.2 2.4 3.6 4.6 8.5

Total 10 Yrs
Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 (2007-16)
Cash from Operating Activity (CFO) 55 81 126 134 205 136 252 201 259 405 1,854
Cash from Investing Activity (CFI) (313) (114) (119) (75) (94) (46) (59) (73) (96) (275) (1,263)
Cash from Financing Activity (CFF) 289 31 9 (50) (132) (60) (213) (134) (164) (128) (553)
Net Cash Flow (CFO+CFI+CFF) 30 (1) 16 8 (21) 30 (19) (6) (1) 2 39
Cash & Eq. at the end of year 23 22 22 44 10 37 16 11 10 10

Total Retained Earnings (RE) in 10 Yrs (A) 481

Total increase in Mcap in 10 yrs (B) 1,645
Value created per INR of RE (B/A) 3.42 Source: Screener
 Earnings Power Value (Bruce Greenwald)
Read the book - Value Investing: From Graham to Buffett and Beyond by Bruce Greenwald (EPV is explained P
Explanation - Earnings power value (EPV) is a technique for valuing stocks by making an assumption about the sustainability
of capital but assuming no further growth. EPV formula = Adjusted Earnings / Cost of Capital

Company Name MEGHMANI ORGANICS LTD

Latest Year Ended Mar-18

Calculation of Normalized Earnings

(Rs Crore) Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Sales 1,178 1,294 1,332 1,420 1,803
EBIT 121 135 210 207 366
Less - Adjustment 1 1 1 1 2
EBIT (Adjusted) 121 134 208 206 364
EBIT Margin'(Adjusted) 10% 10% 16% 14% 20%
Tax Rate 34% 23% 24% 25% 27%
Earnings After Tax (Adjusted) 80 103 158 153 266
Depreciation 80 75 77 91 95
Maintenance Capex (See Table Below) 42 0 79 13 10
Earnings After Tax (Normalized, A) 118 177 156 231 350
Reported Profit After Tax (B) 23 44 83 88 171

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/14 Mar/15 Mar/16 Mar/17 Mar/18
Fixed Assets (PPE) 689 781 735 778 795
Net Sales 1,178 1,294 1,332 1,420 1,803
PPE/Sales 0.58 0.60 0.55 0.55 0.44
Change in Sales 120 116 38 87 384
Total Capex 108 64 100 61 196
Growth Capex 65 63 21 48 209
Maintenance Capex 42 0 79 13 -14

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)
king an assumption about the sustainability of current earnings and the cost
rmula = Adjusted Earnings / Cost of Capital

EPV with Different Cost of Capital

Discount Rate EPV Net Cash** Total EPV Per Share
10% 3,505 -105 3,400 134
12% 2,921 -105 2,816 111
15% 2,337 -105 2,232 88
Current Market Cap (Rs Crore) 1,874
EPV as % of Market Cap 150%

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

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

5% of reported EBIT as this adjustment

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

use 12% discount rate/cost of capital.

at I have used here

over 5-7 years

owth Capex calculated above

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

MEGHMANI ORGANICS LTD MEGHMANI ORGANICS 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) 281 Year 1-3 10% 0 Excess Cash (Latest)
1 FY18 186 166 Year 4-6 8% 1 FY18
2 FY19 205 163 Year 7-10 5% 2 FY19
3 FY20 226 161 Discount Rate 12% 3 FY20
4 FY21 244 155 4 FY21
5 FY22 263 149 Last 5-Years' CAGR 5 FY22
6 FY23 284 144 Sales 11% 6 FY23
7 FY24 298 135 PBT 41% 7 FY24
8 FY25 313 127 FCF 20% 8 FY25
9 FY26 329 119 9 FY26
10 FY27 345 111 10 FY27
10 3,453 1,112 10
Intrinsic Value 2,822 Intrinsic Value
Current Mkt. Cap. 1,874 Current Mkt. Cap.
Premium/(Discount) to IV -34% 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

MEGHMANI ORGANICS LTD

Dhandho IV - Higher Range
FCF (Rs Cr) PV of FCF (Rs Cr) Assumed FCF Growth
Excess Cash (Latest) 281 Year 1-3 20%
203 182 Year 4-6 15%
244 195 Year 7-10 10%
293 208 Discount Rate 12%
337 214
387 220
445 226
490 222
539 218
593 214
652 210
9,779 3,149
Intrinsic Value 5,536
Current Mkt. Cap. 1,874
Premium/(Discount) to IV -66%

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 GHMANI ORGANICS LTD Company Name
Year Ended Mar/18 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 109.4 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 26.5 Long-Term Growth Rate

Ben Graham Value (Rs Crore) 6,735 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 1,874 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)
GHMANI ORGANICS LTD
Mar/18

109.4
8.5
53.1

12,541
1,874

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
MEGHMANI ORGANICS LTD

Initial Cash Flow (Rs Cr) 169 2,905

1,874
Years 1-5 6-10 155%
FCF Growth Rate 12% 8%
Discount Rate 12%
Terminal Growth Rate 1%

Net Debt Level (Rs Cr) 105

Year FCF Growth Present Value

1 190 12% 169
2 213 12% 169
3 238 12% 169
4 267 12% 169
5 299 12% 169
6 323 8% 163
7 348 8% 158
8 376 8% 152
9 406 8% 147
10 439 8% 141

Final Calculations
Terminal Year 443
PV of Year 1-10 Cash Flows 1,608
Terminal Value 1,297
Total PV of Cash Flows 2,905
Current Market Cap (Rs Cr) 1,874

Note: See explanation of DCF here

 Valuation
S LTD

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
MEGHMANI ORGANICS LTD
Particulars Mar/09 Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15
Net Profit (Rs Crore) 37 52 38 3 17 23 44
Net Profit Margin 5% 6% 4% 0% 2% 2% 3%
Return on Equity 9% 8% 6% 1% 6% 7% 8%

Calculations (Enter values only in black cells)

Estimated CAGR in Net Profit over next 10 years 8%
Estimated Net Profit after 10 years (Rs Cr) 370
Current P/E (x) 10.9
Exit P/E in the 10th year from now (x, Estimated) 5.0
Esti. Market Cap (10th year from now; Rs Cr) 1,849
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 595
Current Market Cap (Rs Cr) 1,874

Note: See explanation of this model here

el
Mar/16 Mar/17 Mar/18 CAGR (9-Yr) CAGR (5-Yr)
83 88 171 19% 58%
6% 6% 10%
18% 16% 27%
 Intrinsic Value Range
MEGHMANI ORGANICS LTD
Lower Higher
Remember! Give importance to a stock's valuations / fair va
EPV 2,816
only "after" you have answered in "Yes" to these two questio
Dhandho 2,822 5,536 (1) Is this business simple to be understood? and (2) Can
Ben Graham 6,735 12,541 understand this business?
DCF 2,905
Expected Return 595 Don't try to quantify everything. In stock research, the less n
Average 3,175 mathematical you are, the more simple, sensible, and useful
Current Market Cap. 1,874 be your analysis and results. Great analysis is generally "ba
of-the-envelope".
Expected Return 69.40
Also, your calculated "fair value" will be proven wrong in t
future, so don't invest your savings just because you fall in
with it. Don't look for perfection. It is overrated. Focus on
decisions, not outcomes. Look for disconfirming evidenc
 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.
MEGHMANI ORGANICS LTD
SCREENER.IN
Narration Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
Sales 342 361 388 321 354 421 461 450 471 476
% Growth YOY 3% 17% 19% 40% 33% 13%
Expenses 271 286 311 260 281 330 358 333 352 352
Operating Profit 71 75 77 61 72 91 103 117 119 124
Other Income 4 5 1 7 -1 4 11 2 14 14
Depreciation 19 25 24 19 22 23 24 24 24 24
Interest 12 14 13 13 10 11 10 10 9 13
Profit before tax 44 40 41 36 38 62 80 84 100 100
PBT Margin 13% 11% 11% 11% 11% 15% 17% 19% 21% 21%
% Growth YOY -13% 55% 93% 133% 162% 62%
Tax 8 12 9 9 9 19 25 22 23 23
Net profit 36 28 33 27 29 43 55 63 77 77
% Growth YOY -19% 55% 69% 131% 169% 78%
OPM 21% 21% 20% 19% 20% 22% 22% 26% 25% 26%
COMPANY NAME MEGHMANI ORGANICS LTD
LATEST VERSION 2.10 PLEASE DO NOT MAKE ANY CHA
CURRENT VERSION 2.10

META
Number of shares 25.43
Face Value 1
Current Price 73.7
Market Capitalization 1874.19

PROFIT & LOSS

Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Sales 791.4 816.28 1045.09 1062.24 1058.48 1178.33
Raw Material Cost 548.83 538.42 658.9 684.22 630.45 745.27
Change in Inventory 22.81 -2.48 -11.45 27.04 15.08 53.97
Power and Fuel 38.89 38.95 61.7 59.85 73.63 88.63
Other Mfr. Exp 41.77 28.92 20.6 39.84 35.69 82.6
Employee Cost 18.13 31.26 41.73 42.57 46.14 54.83
Selling and admin 52.96 69.29 7.39 40.22 44.36 27.6
Other Expenses 47.07 -11.8 94.82 64.41 58.95 38
Other Income 25.16 22.73 8.3 12.63 13.34 6.13
Depreciation 17.35 51.43 68.65 74.66 75.12 80.24
Interest 26.1 41.87 54.04 73.51 64.33 67.61
Profit before tax 48.27 48.19 34.11 22.63 58.23 53.65
Tax 11.04 8.56 4.32 19.11 29.93 18.19
Net profit 37.12 51.68 38 3.48 17.22 22.8
Dividend Amount 8.39 10.17 10.17 2.54 2.54 2.54

Quarters
Report Date Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17
Sales 342.33 360.51 388.01 320.92 353.5 421.21
Expenses 271.22 285.62 310.9 260.3 281.16 330.01
Other Income 4.11 4.98 1.4 7.4 -1.36 4.48
Depreciation 19.05 25.36 23.95 18.99 22.43 23.02
Interest 12.32 14.39 13.29 12.76 10.45 10.66
Profit before tax 43.85 40.13 41.27 36.26 38.09 62.01
Tax 8.28 12.19 8.76 9.15 9.45 18.68
Net profit 35.57 27.94 32.52 27.11 28.64 43.33
Operating Profit 71.11 74.89 77.11 60.62 72.34 91.2

BALANCE SHEET
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Equity Share Capital 25.43 25.43 25.43 25.43 25.43 25.43
Reserves 402.66 441.87 468.85 450.53 476.59 492.69
Borrowings 568.85 639.36 714.56 762.7 717.14 754.35
Other Liabilities 266.39 284.31 300.92 297.54 354.91 405.77
Total 1263.33 1390.97 1509.76 1536.2 1574.07 1678.24
Net Block 199.49 641.27 653.89 655.66 623.35 689.22
Capital Work in Progress 418.39 43.55 56.45 85.71 164.69 126.14
Investments 40.97 19.3 35.92 19.57 24.6 0.56
Other Assets 604.48 686.85 763.5 775.26 761.43 862.32
Total 1263.33 1390.97 1509.76 1536.2 1574.07 1678.24
Receivables 282.99 315.69 343.97 332.63 339.32 352.32
Inventory 113.21 138.63 152.47 172.23 181.09 249.58
Cash & Bank 23.43 22 21.99 44.02 9.88 37.28
No. of Equity Shares 254314211 254314211 254314211 254314211 254314211 254314211
New Bonus Shares
Face value 1 1 1 1 1 1

CASH FLOW:
Report Date Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Cash from Operating Activity 54.66 81.45 125.98 134.01 204.84 136.11
Cash from Investing Activity -312.81 -113.96 -118.99 -75.23 -93.85 -46.01
Cash from Financing Activity 288.54 31.08 9.04 -50.47 -132.12 -60.14
Net Cash Flow 30.39 -1.43 16.03 8.31 -21.13 29.96

PRICE: 9.01 17.75 15.06 7.842 5.92 8.95

DERIVED:
Adjusted Equity Shares in Cr 25.43 25.43 25.43 25.43 25.43 25.43
DO NOT MAKE ANY CHANGES TO THIS SHEET

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

1294.21 1332.18 1419.59 1803.32
740.1 737 729.39 916.39
-23.93 30 -64.58 6.08
101.5 107.68 96.03 108.53
58.75 90.8 81.02 104.72
69.16 54.54 60.43 66.64
83.21 74.4 35.05 78.62
17.05 36.95 68.14 104.48
8.81 25.47 12.42 30.33
74.74 76.76 90.72 94.77
74.62 63.11 50.89 39.87
59.97 146.41 155.77 325.72
13.99 35.12 39.56 87.79
43.89 82.5 87.7 171.32
10.17 7.63 10.17 10.17

Sep-17 Dec-17 Mar-18 Jun-18

460.66 450.43 471.02 476.48
357.87 333.23 352.19 352.49
10.56 1.53 13.75 14.14
23.56 24.43 23.76 24.29
10.12 9.91 9.18 13.45
79.67 84.4 99.64 100.39
24.58 21.79 22.73 23.32
55.09 62.61 76.9 77.07
102.79 117.2 118.83 123.99

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

25.43 25.43 25.43 25.43
 526.1 605.78 693.02 845.11
643.59 578.05 460.95 385.82
358.16 329.97 405.89 562.06
1553.28 1539.23 1585.29 1818.42
781.39 735.36 778.14 794.89
22.88 92 19.11 103.41
23.9 0.59 29.11 71.99
725.11 711.28 758.93 848.13
1553.28 1539.23 1585.29 1818.42
316.7 326.93 330.91 374.5
215.78 312.58 241.68 267.74
15.59 11.02 10.19 9.92
254314211 254314211 254314211 254314211

1 1 1 1

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

252.2 200.88 258.83 404.89
-58.61 -72.66 -95.9 -274.5
-213.05 -133.82 -163.62 -128.23
-19.46 -5.6 -0.68 2.16

16.9395 27.397368 39.847368 99.638095

25.43 25.43 25.43 25.43

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