Motherson Sumi
Motherson Sumi
Motherson Sumi
www.safalniveshak.com
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IMPORTANT INSTRUCTIONS
1. Ensure that the company whose data you are downloading has numbers at least starting from FY08 (March 2008). This is be
from, say, FY10, you will see incorrect data for FY08 and FY09 (which will be of Hero Motocorp on whose financials I have crea
2. All financial data of your chosen company will be automatically updated in the sheet you download, except "Cash and Bank"
figures, which you must update manually from the company's annual reports. Don’t forget to make these changes as these num
3. You may update the sheet and add your own analysis, formulae etc. and then upload again to Screener.in site using the Step
"Data Sheet" because this will cause errors in your future downloads.
4. DON’T touch any cell except the black ones, where you are required to update the numbers manually from Annual Reports (j
the growth assumptions etc.
4. I have added Comments and Instructions wherever necessary so as to explain the concepts. Read those carefully before wo
5. This sheet is not a replacement of the work required to read annual reports as part of the analysis process. So please do tha
some discrepancy in numbers (though rare), but you will know this only when you read annual reports.
6. I could not find a bug/errors in this spreadsheet, but if you notice some, please email me at - [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.
Please! It's your money. Please don't blame me if results of this excel
cause you to lose it all! I've designed this excel to aid your own thinking,
but you alone are responsible for your actions. I want to live peacefully
ever after! I am not a sadist who wants you to do the hard work by
analyzing companies on your own. But I'd rather give you a compass
instead of a map, for you can confuse map with territory and lose it all.
All the best!
ndage growth
Buffett Checklist - Read, Remember, Follow!
Source - Buffettology by Mary Buffett & David Clark
Parameter
Conclusion
Never Forget
Buffett Checklist - Read, Remember, Follow!
Source - Buffettology by Mary Buffett & David Clark
Explanation
Seek out companies that have no or less competition, either due to a patent or brand name or similar intangible that
makes the product unique. Such companies will typically have high gross and operating profit margins because of their
unique niche. However, don't just go on margins as high margins may simply highlight companies within industries with
traditionally high margins. Thus, look for companies with gross, operating and net profit margins above industry norms.
Also look for strong growth in earnings and high return on equity in the past.
Try to invest in industries where you possess some specialized knowledge (where you work) or can more effectively
judge a company, its industry, and its competitive environment (simple products you consume). While it is difficult to
construct a quantitative filter, you should be able to identify areas of interest. You should "only" consider analyzing
those companies that operate in areas that you can clearly grasp - your circle of competence. Of course you can
increase the size of the circle, but only over time by learning about new industries. More important than the size of the
circle is to know its boundaries.
Seeks out companies with conservative financing, which equates to a simple, safe balance sheet. Such companies
tend to have strong cash flows, with little need for long-term debt. Look for low debt to equity or low debt-burden ratios.
Also seek companies that have history of consistently generating positive free cash flows.
Rising earnings serve as a good catalyst for stock prices. So seek companies with strong, consistent, and expanding
earnings (profits). Seek companies with 5/10 year earnings per share growth greater than 25% (along with safe
balance sheets). To help indicate that earnings growth is still strong, look for companies where the last 3-years
earnings growth rate is higher than the last 10-years growth rate. More important than the rate of growth is the
consistency in such growth. So exclude companies with volatile earnings growth in the past, even if the "average"
growth has been high.
Like you should stock to your circle of competence, a company should invest its capital only in those businesses within
its circle of competence. This is a difficult factor to screen for on a quantitative level. Before investing in a company,
look at the company’s past pattern of acquisitions and new directions. They should fit within the primary range of
operations for the firm. Be cautious of companies that have been very aggressive in acquisitions in the past.
Buffett prefers that firms reinvest their earnings within the company, provided that profitable opportunities exist. When
companies have excess cash flow, Buffett favours shareholder-enhancing maneuvers such as share buybacks. While
we do not screen for this factor, a follow-up examination of a company would reveal if it has a share buyback plan in
place.
Seek companies where earnings have risen as retained earnings (earnings after paying dividends) have been
employed profitably. A great way to screen for such companies is by looking at those that have had consistent
earnings and strong return on equity in the past.
Consider it a positive sign when a company is able to earn above-average (better than competitors) returns on equity
without employing much debt. Average return on equity for Indian companies over the last 10 years is approximately
16%. Thus, seek companies that earn at least this much (16%) or more than this. Again, consistency is the key here.
That's what is called "pricing power". Companies with moat (as seen from other screening metrics as suggested above
(like high ROE, high grow margins, low debt etc.) are able to adjust prices to inflation without the risk of losing
significant volume sales.
Companies that consistently need capital to grow their sales and profits are like bank savings account, and thus bad
for an investor's long term portfolio. Seek companies that don't need high capital investments consistently. Retained
earnings must first go toward maintaining current operations at competitive levels, so the lower the amount needed to
maintain current operations, the better. Here, more than just an absolute assessment, a comparison against
competitors will help a lot. Seek companies that consistently generate positive and rising free cash flows.
Sensible investing is always about using “folly and discipline” - the discipline to identify excellent businesses, and wait
for the folly of the market to drive down the value of these businesses to attractive levels. You will have little trouble
understanding this philosophy. However, its successful implementation is dependent upon your dedication to learn and
follow the principles, and apply them to pick stocks successfully.
Net Block 1,455 1,765 4,692 5,277 5,919 6,129 7,147 12,193 14,712 18,423
Capital Work in Progress 181 392 446 386 647 956 1,397 1,935 2,585 1,067
Investments 47 47 94 72 75 65 590 474 792 855
Other Assets 2,133 2,953 6,828 7,111 8,746 10,448 10,770 17,769 19,409 22,985
Total 3,816 5,156 12,060 12,845 15,387 17,598 19,904 32,370 37,498 43,330
Working Capital 300 666 1,242 1,458 1,158 1,305 1,332 4,021 2,169 2,152
Debtors 769 956 3,013 2,940 3,238 3,014 4,654 4,655 5,624 6,166
Inventory 675 1,038 2,250 2,604 3,282 3,750 2,285 3,072 4,013 4,663
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 42 42 74 42 39 32 46 40 36 35
Inventory Turnover 10 8 7 10 9 9 16 14 14 14
Fixed Asset Turnover 4.6 4.7 3.1 4.8 5.1 5.7 5.2 3.5 3.8 3.4
Debt/Equity 0.7 0.8 2.5 2.1 1.6 1.5 1.4 1.3 1.0 1.1
Return on Equity 20% 28% 10% 20% 37% 39% 40% 26% 23% 19%
Return on Capital Employed 20% 24% 9% 15% 24% 25% 25% 19% 18% 16%
Profit & Loss Account / Income Statement
MOTHERSON SUMI SYSTEMS LTD
Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Trailing
Sales 6,697 8,238 14,767 25,298 30,414 34,661 37,216 42,376 56,303 63,523 65,540
% Growth YOY 23% 79% 71% 20% 14% 7% 14% 33% 13%
Expenses 6,362 7,471 13,955 23,822 28,017 31,819 33,668 38,282 51,174 58,175 60,349
Material Cost (% of Sales) 62% 64% 64% 66% 65% 65% 60% 61% 61% 58% Check for wide fluctuations in key
Power and Fuel 2% 2% 2% 2% 2% 2% 2% 2% 1% 2% expense items. For manufacturing
Other Mfr. Exp 3% 3% 3% 2% 2% 2% 2% 2% 3% 3% firms, check their material costs etc. For
Employee Cost 18% 15% 16% 17% 17% 18% 19% 19% 20% 22% services firms, look at employee costs.
Selling and Admin Cost 7% 6% 5% 4% 4% 4% 4% 4% 4% 4%
Operating Profit 335 767 812 1,477 2,397 2,842 3,548 4,093 5,129 5,348 5,191
Operating Profit Margin 5% 9% 5% 6% 8% 8% 10% 10% 9% 8% 8%
Other Income 332 169 145 322 311 214 177 424 125 333 328
Other Income as % of Sales 5.0% 2.0% 1.0% 1.3% 1.0% 0.6% 0.5% 1.0% 0.2% 0.5% 0.5%
Depreciation 260 247 380 715 817 921 1,087 1,059 1,575 2,058 2,248
Interest 63 58 165 250 294 318 345 375 411 423 479
Interest Coverage(Times) 6 12 3 4 6 7 8 9 9 9 7
Profit before tax (PBT) 343 631 412 834 1,596 1,817 2,293 3,083 3,267 3,200 2,793
% Growth YOY 84% -35% 103% 91% 14% 26% 34% 6% -2%
PBT Margin 5% 8% 3% 3% 5% 5% 6% 7% 6% 5% 4%
Tax 109 189 215 384 499 526 519 910 1,007 1,102 952
Net profit 234 443 196 451 1,097 1,292 1,774 2,172 2,260 2,098 1,840
% Growth YOY 90% -56% 130% 143% 18% 37% 22% 4% -7%
Net Profit Margin 3% 5% 1% 2% 4% 4% 5% 5% 4% 3% 3%
EPS 0.8 1.6 0.7 1.6 3.6 4.2 5.8 6.9 7.2 6.6 5.8
% Growth YOY 89% -56% 129% 120% 18% 37% 19% 4% -7%
Price to earning 19.3 17.8 34.7 23.7 21.2 36.4 20.5 24.0 29.0 22.5 17.8 17.750053 36.3555898
Price 16 28 25 38 76 153 118 165 207 150 104
Dividend Payout 27.0% 27.3% 33.6% 26.5% 28.8% 30.7% 25.6% 18.1% 29.7% 29.4%
Market Cap 4,517 7,861 6,819 10,674 23,301 46,953 36,441 52,197 65,464 47,274
Retained Earnings 171 322 130 331 781 895 1,320 1,780 1,590 1,482
Buffett's $1 Test 4.9
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.
10yrs 9yrs 8yrs 7yrs 6yrs 5yrs 4yrs 3yrs 2yrs MIN Max Average
Sales Growth% 28% 29% 34% 17% 16% 16% 20% 22% 13% 13% 18%
NetProfit Growth % 28% 21% 40% 29% 14% 13% 6% -2% -7% 6% -1%
PE growth 2% 3% -6% -1% 1% -11% 3% -3% -22%
Cash Flow Statement
MOTHERSON SUMI SYSTEMS LTD
Rs Cr Mar-10
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
Mar-18 Mar-19 Total
Cash from Operating Activity (CFO) 408 411 589 1,486 2,695 3,390 2,188 3,800 3,264 4,312 22,543
% Growth YoY 1% 43% 152% 81% 26% -35% 74%-14% 32%
Cash from Investing Activity -373 -805 -1,874 -1,089 -1,372 -2,844 -1,906 -6,145
-3,194 -3,311 -22,914
Cash from Financing Activity 31 401 1,380 -256 -1,080 495 -263 5,518
-2,221 -225 3,779
Net Cash Flow 67 6 95 142 243 1,040 19 3,172
-2,152 777 3,408
CFO/Sales 6% 5% 4% 6% 9% 10% 6% 9% 6% 7%
CFO/Net Profit 175% 93% 300% 330% 246% 262% 123% 175% 144% 206%
Capex** 315 212 364 565 607 937 1,156 1,638 1,238 824
FCF 93 199 225 921 2,088 2,453 1,032 2,162 2,026 3,488 14,687
Average FCF (3 Years) 2,559
FCF Growth YoY 113% 13% 310% 127% 17% -58% 109% -6% 72%
FCF/Sales 1% 2% 2% 4% 7% 7% 3% 5% 4% 5%
FCF/Net Profit 38% 51% 87% 207% 273% 284% 80% 139% 127% 216%
Operating Margin 5.0% 9.3% 5.5% 5.8% 7.9% 8.2% 9.5% 9.7% 9.1%
PBT Margin 5.1% 7.7% 2.8% 3.3% 5.2% 5.2% 6.2% 7.3% 5.8%
Net Margin 3.5% 5.4% 1.3% 1.8% 3.6% 3.7% 4.8% 5.1% 4.0%
Debtor Days 41.9 42.4 74.5 42.4 38.9 31.7 45.6 40.1 36.5
Inventory Turnover 9.9 7.9 6.6 9.7 9.3 9.2 16.3 13.8 14.0
Fixed Asset Turnover 4.6 4.7 3.1 4.8 5.1 5.7 5.2 3.5 3.8
Debt/Equity 0.7 0.8 2.5 2.1 1.6 1.5 1.4 1.3 1.0
Debt/Assets 21.4% 24.5% 38.2% 38.2% 31.5% 29.2% 30.5% 32.0% 27.7%
Interest Coverage (Times) 6.4 12.0 3.5 4.3 6.4 6.7 7.6 9.2 9.0
Return on Equity 20.1% 27.5% 10.5% 19.7% 37.1% 38.9% 40.3% 26.3% 22.9%
Return on Capital Employed 20.5% 24.0% 8.9% 15.1% 24.2% 25.3% 25.2% 18.6% 18.2%
Free Cash Flow (Rs Cr) 93 199 225 921 2,088 2,453 1,032 2,162 2,026
Mar/19
12.8%
-2.0%
-7.2%
0.0%
32.1%
72.2%
8.4%
5.0%
3.3%
35.4
13.6
3.4
1.1
26.6%
8.6
19.1%
16.1%
3,488
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
70,000
Revenue Revenue and Pro
200%
Check for a rising trend. Check for a ris
60,000 150% Compare grow
50,000
100%
40,000
50%
30,000
20,000 0%
Jan/11 Jan/13
10,000 -50%
- -100%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18 Revenue Growth
Net Profit Grow
Management Effectiveness
Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
ROE 20% 28% 10% 20% 37% 39% 40% 26% 23%
ROCE 20% 24% 9% 15% 24% 25% 25% 19% 18%
Cash Flows
Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18
Operating Cash Flow 408 411 589 1,486 2,695 3,390 2,188 3,800 3,264
Free Cash Flow 93 199 225 921 2,088 2,453 1,032 2,162 2,026
%
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/10 Jan/12 Jan/14 Jan/16 Jan/18
ROE ROCE
%
Jan/11 Jan/13 Jan/15 Jan/17 Jan/19
%
%
Revenue Growth PBT Growth
Net Profit Growth
Mar/19
19%
16%
Mar/19
63,523
3,200
2,098
Mar/19
4,312
3,488
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 62% 64% 64% 66% 65% 65% 60% 61% 61% 58%
Change in Inventory 0% 2% -1% 1% 1% 2% 0% 0% 0% 0%
Power and Fuel 2% 2% 2% 2% 2% 2% 2% 2% 1% 2%
Other Mfr. Exp 3% 3% 3% 2% 2% 2% 2% 2% 3% 3%
Employee Cost 18% 15% 16% 17% 17% 18% 19% 19% 20% 22%
Selling and Admin Cost 7% 6% 5% 4% 4% 4% 4% 4% 4% 4%
Other Expenses 3% 2% 4% 3% 3% 3% 3% 2% 2% 3%
Operating Profit 5% 6% 7% 3% 6% 4% 10% 10% 8% 8%
Other Income 5% 2% 1% 1% 1% 1% 0% 1% 0% 1%
Depreciation 4% 3% 3% 3% 3% 3% 3% 2% 3% 3%
Interest 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Profit Before Tax 5% 8% 3% 3% 5% 5% 6% 7% 6% 5%
Tax 2% 2% 1% 2% 2% 2% 1% 2% 2% 2%
Net Profit 4% 5% 2% 2% 3% 2% 3% 4% 3% 3%
Dividend Amount 1% 1% 1% 0% 1% 1% 1% 1% 1% 1%
P.S. In case of companies earning negative FCF, where this model will not work, you must use a normalized positive FCF as
starting number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the his
this business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of
Calculation
by Mohnish Pabrai
Avg 5-Yr Net Profit (Rs Crore) 1,919.1 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 6.9 Long-Term Growth Rate
Ben Graham Value (Rs Crore) 42,896 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 32,748 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
1,919.1
8.5
13.9
69,479
32,748
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
MOTHERSON SUMI SYSTEMS LTD
Final Calculations
Terminal Year 9,251
PV of Year 1-10 Cash Flows 28,460
Terminal Value 29,786
Total PV of Cash Flows 58,245
Current Market Cap (Rs Cr) 32,748
META
Number of shares 315.79
Face Value 1
Current Price 103.7
Market Capitalization 32747.78
Quarters
Report Date Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
Sales 11254.03 13077.43 13420.43 14387.65 15407.83 14775.46
Expenses 10043.36 11942.21 12192 13138.4 13907.74 13363.36
Other Income 69.52 -59.31 73.54 60.93 64.95 81.03
Depreciation 270.69 376.79 397.83 393.71 406.85 447.05
Interest 83.8 117.55 77.11 103.15 112.99 100.46
Profit before tax 925.7 581.57 827.03 813.32 1045.2 945.62
Tax 219.84 234.25 233.58 251.61 287.7 327.27
Net profit 474.78 277.99 436.2 364.49 518.36 618.35
Operating Profit 1210.67 1135.22 1228.43 1249.25 1500.09 1412.1
BALANCE SHEET
Report Date Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Equity Share Capital 37.46 38.8 38.8 58.8 88.2 88.2
Reserves 1127.46 1570 1832.5 2230.2 2871.1 3235.6
Borrowings 817.91 1260.7 4602.3 4903.9 4839.7 5130.6
Other Liabilities 1833.13 2286.5 5586.2 5652.1 7587.9 9143.1
Total 3815.96 5156 12059.8 12845 15386.9 17597.5
Net Block 1454.77 1764.5 4692.2 5277 5918.9 6128.9
Capital Work in Progress 180.84 392.1 445.8 385.9 647.1 955.8
Investments 47.09 46.5 93.8 71.6 74.9 64.9
Other Assets 2133.26 2952.9 6828 7110.5 8746 10447.9
Total 3815.96 5156 12059.8 12845 15386.9 17597.5
Receivables 768.77 956 3012.7 2940 3238.4 3014.4
Inventory 675.18 1037.6 2249.6 2603.6 3282.2 3750
Cash & Bank 343.05 353.2 455.7 594.4 906.1 1891.9
No. of Equity Shares 374597000 387547000 387547000 587946240 881919360 881919360
New Bonus Shares 195982080
Face value 1 1 1 1 1 1
CASH FLOW:
Report Date Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Cash from Operating Activity 408.32 410.5 588.7 1486 2695 3389.7
Cash from Investing Activity -372.89 -805.4 -1874.1 -1088.6 -1372.3 -2844.4
Cash from Financing Activity 31.17 401 1380 -255.8 -1080.1 494.5
Net Cash Flow 66.6 6.1 94.6 141.6 242.6 1039.8
DERIVED:
Adjusted Equity Shares in Cr 276.59 277.89 277.89 278.33 307.73 307.73
DO NOT MAKE ANY CHANGES TO THIS SHEET
TESTING:
This is a testing feature currently.
You can report any formula errors on the worksheet at: [email protected]
… do ANYTHING.
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