Bucket Question

Real Money Is PAT getting converted to cash?

Real Money Is the company paying regular tax?

Coffee Can Sales Growing at > 10% CAGR

Operating Profits Growing at > 7% CAGR

ROCE > 15%
Sales CAGR ~ Profit CAGR over time
RoCE > CoC

Is Market cap increasing because of increasing P/E or increasing earnings?

Efficiency of Retained Earnin Is the company making good use of retained

Is Profit Before Tax funding fixed assets?

Value Investing Price to Earnings
PEG
Price to Book Value
Price to Sales
Earnings Yield
Dividend Payout Ratio
Dividend Yield
High FCF
FCF/Sales
Cash and Eq as a %age of Mcap

Solvency Debt to Equity Ratio

Interest Coverage Ratio
CFO > CFI + CFF
Net NPA
Capital Adequacy Ratio

Accounting Quality FCF Checks

Management Quality management paying themselves high salary

management = promoter
 Inadequate Disclosurse

Subsidiaries & joint ventures

Peer Comparison
 Receivables Days

Inventory and Receivables

Receivables Days = Receivables days * 365/Sales

Inventory Turnover=Inventory*365/(Raw material cost 5 years)

 Ideal indicators Alternate Possibilities

cCFO ~ cCPAT cCFO >> cPAT

cCFO << cPAT

cCFO growth equal to cPAT growth

large amount of cPAT or cCFO is not from a single year

Tax is the corporate tax rate at 30% Tax rate below 30%
Tax not being paid
over 5 years, 10 years, 3 years

over 5 years, 10 years, 3 years

over 5 years, 10 years, 3 years

e of increasing P/E or increasing earnings?

Earnings Growth > P/E growth

increase in market cap > retained profits

Company growth rate ~ SSGR

SSGR = NFAT * NPM * (1-DPR) - Dep
PBT/NFA > 1

Net Fixed Asset Turnover: Sales/Fixed Assets

are we buying the company at a reasonable price?

FCF is positive FCF negative: accounting fraud

FCF Change ~ CFO Change FCF is from acquisitions

FCF is from dubiuos CFO

FCF able to fund capex? FCF not used for capex

Change in acocunting policy

CWIP/Gross block (high = unsubstantiated capex)

management salary/PAT Close to limit of max from SEBI

salary did not increase when profits were down?

promoters not taking salary from company and if they do it is reasonable

promoters do not take interest from company (like rent) from separate businesses
 Unexpected smooth earnings through volatile times
Continuous history of meeting market expectation of
earnings

Decreasing Increasing

days * 365/Sales
Increasing could be because of tough environment
B2B companies do not work on advance payment basis = receivab

365/(Raw material cost 5 years)

Higher is better
Low can mean that the company is stuck in working capital
Angles to investigate
Higher interest expense
Treatment of depreciation
Are the sales bogus?
Are the CFO bogus?
company may have taken a loan mortgaging its assets with multiple banks as intermediaries as export advance
company may have shown a debt as cash flow from operations (poor accounting practice)

Tax %age may be special up to a certain year only

Is it a cyclical stock?

Is company in a commodity business?

Does the company have a monopoly?
Is the company fradulent?
Are the raw material prices increasing?

company re-rating (mid-cap to large-cap)

speculation in company stock; stock might get derated

company maybe funding subsidiaries

cash generated may not be real
company maybe doing inorganic stupidity
company maybe paying dividend to promoters
company is better off returning money to shareholders

company may need to raise debt to grow - may not be able to

grow without increasing insolvency risk or company might need to
dilute equity
company may not be making good use of debt to grow faster and
competitors may catch up
How efficiently does the company use its fixed assets to generate sales?

NFAT=Sales/Avg Fixed assets; capex = new assets + depreciation

new assets = (net block + CWIP)-(net block last year + CWIP last
year)
avg fixed assets = (net block this year + net block last year)/2
High NFAT = capital intensive company, for example: sales fals,
NFAT increases
aggressive revenue and earning recognition practice?
writing off inventory = impairment loss
Holding off on writing down inventory
company is capitalizing the operating expenses making PAT look
high as capex is not deducted from revenue

Frequent acquisitions
satyam - maytas acquisition was to fill a hole in the book where
they had bogus employees
acquisitions boost CFO; account receivables of the acquired
company flow through CFO of the acquirer; costs to generate the
receivables flow through CFI as acquisition cost

showing debt as inflow under CFO

debt classified as CFO - complex structured agreement
showing sale of business divisions as inflow under CFO

FCF given for dividends, write-off/loss of investments in subsidiary

entities
Is the company investing in subsidiaries while it is carrying debt?
Why not service the debt first?
FCF used for debt, interest expense, Dividends, increase in cash &
eq
revenue recognition policy
capitalization of expense
change in accounting years
depreciation assumptions
pension/lease assumptions
has the company stopped disclosing an important metrics
have they failed to highlight contingent liability/balance sheet
obligation like corporate guarantee given to loans for 3rd parties

Did they increase salary when profits were down?

interest free deposit to promoters to acquire property and then

rent them out to the same company
Sale/purchase to/from promoters
M&A with promoter owned entitities
Loans to promoter entitities
Deposits from promoter entities
Pledge %
Promoter Holding %
MF Holding %
FII Holding %
Promoter Salary/Net Profits
Diluted Equity/Equity in last 3 years
No related parties consolidated level
Name of party to whom loan given
Conflicts of interests between holding companies
Frequent changes in useful life of assets to reduce depreciation
and reduce losses
company selling property to promoter
company paying rent to promoters
shares of promoters
salary of promoters
delay in writeoff
advance to promoter group entity
change in promoter remuneration vs. revenue growth

How many related?

How many investments?
How many loans?
Related to proomoter?
Write-offs?
Past records?

Working capital days vs. Peers

Margin vs. Peers
Depreciation vs. Peers
Gross Block Turnover
Revenues/Capex
FCF vs. Peers
Sales CAGR better than competitors; > 15% recommended
Poor capital allocation decisions leading to value erosion
 Receivables maybe bogus
Receivables maybe classified under a different head in balance sheet
Receivables maybe being sold off

ot work on advance payment basis = receivable days important for B2B

(INR Crores/10 Millions) TITAN COMPANY LTD

Narration Mar-10 Mar-11 Mar-12 Mar-13

Sales 4773 6533 8848 10123
Operating Profit 399 618 838 1014
Operating Profit Margin (OPM%) 8% 9% 9% 10%
Other Income 10 55 92 99
Interest 25 35 44 51
Profit before tax (PBT) 323 603 840 1007
Tax% 22% 28% 28% 28%
Net Profit after tax (PAT) 251 433 601 725
Net Profit Margin (NPM%) 5% 7% 7% 7%
Cash Profit Margin (CPM%) 6% 16% 1% 4%
10Yr Cash profit Margin (10yr CPM%) 22% 10% 8% 2%
Cash from Operating Activity (CFO) 342 1053 163 553
Capex (NFA+WIP+Dep) 60 149 153
Total Debt (D) 73 68 6 0
Cash + Investments (CI +NCI) 199 1112 970 1142
Sales Growth 37% 35% 14%
Self-Sustainable Growth Rate (SSGR) 118%
PBT/Avg. NFA (<10%,>25%) 217% 250% 237%
ROE on Avg Equity (<7%, >25%) 34% 42% 41% 37%
ROCE (EBIT on Avg CE/TA) (<10%,>35%) 31% 39% 41% 37%
Incremental ROE 3Yr Rolling 40% 39%
Profit/Mcap 62% 51% 3% 3%
Profit Growth 72% 39% 21%
Net Fixed Asset Turnover (High is better) 17.8 22.7 23.0 21.8
Receivables days (Low is better) 7.2 6.6 6.8 6.0
Inventory Turnover (High is better) 123.5 117.5 122.4 137.6
Net Fixed Assets (NFA) 267.8 288.4 383.9 463.9
Capital Work in Progress (CWIP) 12.3 16.6 24.9 41.8
Share Capital 44.4 44.4 88.8 88.8
Dividend Paid (Div) Without DDT 66.6 55.5 155.4 186.4
Dividend Payout (Div/PAT) 26% 13% 26% 26%
Price to earning 1.6 2.0 33.7 31.4
Mcap 408.6 845.8 20294.8 22771.7
Cash + Investments (CI +NCI) 198.9 1112.5 969.5 1142.0
Mcap Growth 107% 2299% 12%
Total Debt (D) 73.0 68.0 5.9 0.0
Total Equity (E) 731.9 1035.6 1460.9 1969.9
Debt to Equity ratio (D/E) 10% 7% 0% 0%
Cost of funds 12.5%
Interest outgo (Rs. Cr.) 25.4 34.5 43.7 50.7
Interest Coverage (OP/Int.Out) 9.9 12.5 13.8 14.3

Cash from Operating Activity (CFO) 341.6 1053.3 162.6 553.0

Cash from Investing Activity (CFI) -31.8 -25.0 -69.9 -141.7
Cash from Financing Activity (CFF) -168.9 -116.8 -234.9 -235.6
Net Cash Flow (CFO+CFI+CFF) 140.9 911.5 -142.2 175.6

Total Retained Earnings (RE) in 10 Yrs 5,293.9

Total increase in Mcap in 10yrs (B) 78,604.4
Value created per INR of RE (B/A) 14.8

Below Added by Kiran

Periods ### ### ### ###
cPAT 251 684 1286 2011
cCFO 342 1395 1558 2111
cCFO/cPAT 1.3593712694 2.03811987 1.21138306 1.04940954

1Y 2Y 3Y
Sales CAGR 37% 36% 28%
35% 24%
14%

Operating Profit CAGR 55% 45% 36%

36% 28%
21%

PBT CAGR 87% 61% 46%

39% 29%
20%

1y 2y 3y
PAT CAGR 72% 55% 42%
39% 29%
 21%

1Y 2Y 3Y
Value Generated per INR of retained profits 1.43949918 29.0470451 18.7366322
51.0592994 24.6402915
4.86691545

Earnings Yield 62% 51% 3% 3%

Price this year/earnings Last year 3.4 46.9 37.9
Price this year/earnings preceding year 80.8 52.6
Price this year/earnings 3 years ago 90.6
Earnings Yield from last year 30% 2% 3%
Earnings Yield from preceding year 1% 2%
Earnings Yield from 3 year ago 1%

Price to Sales 9% 13% 229% 225%

Dividend Per Share 15.0 12.5 1.7 2.1

Dividend Per Share Growth -17% -86% 20%
Dividend Payout Ratio 26% 13% 26% 26%
3 Year Dividend Payout Ratio 22% 23%
Dividend Yield 16.3% 6.6% 0.8% 0.8%

Price to Book Ratio 0.6 0.8 13.9 11.6

Earnings Growth 72% 39% 21%
Sales Growth 37% 35% 14%
PEG 0.0 0.9 1.5

Interest Expense 25.4 34.54 43.73 50.65

Interest Income 9.57 54.94 92.12 99.03
Interest Income - Interest Expense -15.83 20.4 48.39 48.38
cash & eq as a %age of market cap 49% 132% 5% 5%
Net NPA
Capital Adequacy Ratio

Cash & cash equivalent growth

cash & cash equivalent Yield

Mcap Growth explained by P/E Growth 1Y 19% 71% -57%

Mcap Growth explained by P/E Growth 2Y 41% 58%
Mcap Growth explained by P/E Growth 3Y 33%
Mcap Growth explained by P/E Growth 4Y
Mcap Growth explained by P/E Growth 5Y
Mcap Growth explained by P/E Growth 6Y
Mcap Growth explained by P/E Growth 7Y
Mcap Growth explained by P/E Growth 8Y
Mcap Growth explained by P/E Growth 9Y

Mcap Growth explained by Earnings Growth 1Y 81% 29% 157%

Mcap Growth explained by Earnings Growth 2Y 59% 42%
Mcap Growth explained by Earnings Growth 3Y 67%
Mcap Growth explained by Earnings Growth 4Y
Mcap Growth explained by Earnings Growth 5Y
Mcap Growth explained by Earnings Growth 6Y
Mcap Growth explained by Earnings Growth 7Y
Mcap Growth explained by Earnings Growth 8Y
Mcap Growth explained by Earnings Growth 9Y

Free Cash Flow 993.3 13.3 399.8

FCF Change? -980.0 386.5
CFO Change? -890.7 390.3
FCF to Sales 15% 0% 4%
FCF to Market Cap 117% 0% 2%

Gross NPA
Net NPA
Total Advances
Total Provisions
Gross NPA%
Net NPA %
Provision Coverage Ratio
Total Capital
Total Risk Weighted Asset
Capital Adequacy Ratio
Tier - 1 CAR
Tier - 2 CAR
CASA Ratio
Net Interest Margin
RoA
RoE
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Last 4 Quarters
10927 11913 11276 13261 16120 19779 21229
1047 1152 939 1164 1644 1994 2299
10% 10% 8% 9% 10% 10% 11%
117 67 69 -42 70 178 168
87 81 42 38 53 53 136
1010 1049 868 973 1530 1957 2044
27% 22% 22% 28% 28% 29% 27%
735 816 675 711 1130 1404 1501
7% 7% 6% 5% 7% 7% 7%
-8% 3% 4% 6% 0% 2%
3% 3% 4% 3% 3% 2%
-555 503 576 1712 -51 1243
209 197 221 574 308 244
807 100 113 1882 1691 2393
896 217 147 1210 654 1175
8% 9% -5% 18% 22% 23% 7%
105% 92% 72% 54% 47% 48%
187% 160% 118% 99% 115% 129%
29% 26% 19% 17% 22% 23%
22% 26% 19% 12% 17% 17%
35% 30% 24% 20% 20% 21%
3% 2% 2% 2% 1% 1%
1% 11% -17% 5% 59% 24%
17.8 17.0 14.6 11.2 10.9 12.6
5.1 5.8 6.2 5.7 6.7 7.8
157.4 147.4 169.7 160.0 146.9 149.3
614.2 699.1 770.5 1188.7 1473.8 1566.6
32.9 55.2 106.7 152.1 43.4 31.8
88.8 88.8 88.8 88.8 88.8 88.8
186.4 204.2 195.3 230.8 332.9 443.9
25% 25% 29% 32% 29% 32% FV
31.7 42.6 44.6 57.7 74.0 72.2 52.6
23300.3 34801.2 30078.2 41082.3 83656.1 101371.9 79013.0
895.8 216.9 146.8 1209.7 653.9 1174.9
2% 49% -14% 37% 104% 21%
806.8 99.8 113.1 1882.4 1691.0 2393.0
2522.7 3083.9 3506.3 4232.4 5089.9 6070.2
32% 3% 3% 44% 33% 39%

87.1 80.7 42.4 37.7 52.9 52.5

8.4 10.1 15.9 18.9 21.4 26.7

-554.7 502.6 576.1 1712.3 -51.1 1242.9

 -271.2 -118.0 -158.8 -953.2 97.6 -796.6
497.4 -1004.7 -504.8 -165.6 -252.5 -488.8
-328.6 -620.1 -87.5 593.6 -206.0 -42.5

### ### ### ### ### ###

2746 3562 4237 4948 6078 7483 pbt-depreciation-interest-chang
1556 2058 2634 4347 4296 5539 capex-change in investments-oth
0.56655099 0.57782082 0.621801 0.87843398 0.70670716 0.7401979 FCF=CFO+CFI
NCF=CFO+CFI+CFF
4Y 5Y 6Y 7Y 8Y 9Y
23% 20% 15% 16% 16% 17%
19% 16% 12% 13% 14% 15%
11% 10% 6% 8% 11% 12%
8% 8% 4% 7% 10% 12%
9% 2% 7% 10% 13%
-5% 6% 11% 14%
18% 20% 21%

27% 24% 15% 17% 19% 20%

19% 17% 9% 11% 15% 16%
12% 11% 3% 7% 12% 13%
3% 7% -3% 3% 10% 12%
10% -5% 4% 12% 14%
-18% 1% 13% 15%
24% 32% 29%

33% 27% 18% 17% 21% 22%

19% 15% 8% 8% 14% 16%
10% 8% 1% 3% 10% 13%
0% 2% -5% -1% 9% 12%
4% -7% -1% 11% 14%
-17% -4% 13% 17%
12% 33% 31%

4y 5y 6y 7y 8y 9y
31% 27% 18% 16% 21% 21%
19% 17% 9% 9% 15% 16%
 11% 11% 3% 3% 11% 13%
1% 6% -2% 0% 9% 12%
11% -4% -1% 11% 14%
-17% -7% 11% 15%
5% 29% 28%

4Y 5Y 6Y 7Y 8Y 9Y
13.1077154 14.9042559 10.8680619 11.7687383 19.2989318 19.071802
15.564016 16.9450079 12.0482886 12.7638921 20.6516161 20.1449396
2.83056233 8.93830731 4.78321835 7.50056394 17.4599054 17.5901552
0.95608468 10.798286 4.75549436 8.09297276 19.5140364 19.1693661
20.4956098 6.89124508 10.4009555 23.5108112 22.0079809
-11.181133 5.46890065 24.3542517 22.2921646
15.1550881 33.8329722 27.8070525
49.6487292 32.8058234
18.0723401

3% 2% 2% 2% 1% 1%
32.1 47.4 36.8 60.9 117.6 89.7
38.7 48.0 40.9 50.3 124.0 142.5
53.8 57.9 41.5 55.9 102.5 150.3
3% 2% 3% 2% 1% 1%
3% 2% 2% 2% 1% 1%
2% 2% 2% 2% 1% 1%

213% 292% 267% 310% 519% 513%

2.1 2.3 2.2 2.6 3.8 5.0

0% 10% -4% 18% 44% 33%
25% 25% 29% 32% 29% 32%
26% 25% 26% 29% 30% 31%
0.8% 0.6% 0.6% 0.6% 0.4% 0.4%

9.2 11.3 8.6 9.7 16.4 16.7

1% 11% -17% 5% 59% 24%
8% 9% -5% 18% 22% 23%
24.1 3.9 -2.6 10.5 1.3 3.0

87.13 80.69 42.36 37.74 52.92 52.54

117.32 66.81 69.33 -42.38 69.93 178.48
30.19 -13.88 26.97 -80.12 17.01 125.94
 4% 1% 0% 3% 1% 1%

43% 70% -34% 81% 27% -12% 23%

-41% 68% 140% 196% 37% 17% 64%
57% 37% 131% 108% 52% 26% 64%
33% 52% 67% 104% 52% 36% 57%
30% 63% 69% 51% 38% 50%
36% 60% 38% 38% 43%
35% 38% 29% 34%
22% 30% 26%
18% 18%

57% 30% 134% 19% 73% 112% 77%

141% 32% -40% -96% 63% 83% 36%
43% 63% -31% -8% 48% 74% 36%
67% 48% 33% -4% 48% 64% 43%
70% 37% 31% 49% 62% 50%
64% 40% 62% 62% 57%
65% 62% 71% 66%
78% 70% 74%
82% 82%

-763.7 305.8 355.0 1138.2 -358.9 998.9

-1163.6 1069.5 49.1 783.3 -1497.2 1357.8
-1107.7 1057.3 73.5 1136.2 -1763.4 1294.0
-7% 3% 3% 9% -2% 5%
-3% 1% 1% 3% 0% 1%
Growth Trends 10Yr 7Yr 5Yr 3Yr TTM
Sales Growth 0.160957
OPM

earnings times 5.972901 2.496034 1.838863 2.225271

mcap times 193.3732 3.893263 2.270408 2.626919

pbt-depreciation-interest-change in working capital-tax-other operating expense= cash flow from operations
capex-change in investments-other investments=CFI
FCF=CFO+CFI
NCF=CFO+CFI+CFF
TITAN COMPANY LTD

PROFIT & LOSS 15 'Data Sheet'!A15:A999

16 Mar-10 Mar-11 Mar-12 Mar-13
Sales 17 4772.69 6533.14 8848.43 10123.29
Raw Material Cost 18 3496.18 5191.67 7290.97 8307.32
Change in Inventory 19 115.12 498.65 750.75 813.15
Power and Fuel 20 17.73 21.63 25.52 33.84
Other Mfr. Exp 21 69.25 123.53 128.66 117.80
Employee Cost 22 279.01 371.77 400.81 493.48
Selling and admin 23 492.90 566.49 723.91 752.35
Other Expenses 24 133.61 138.78 191.60 217.30
Other Income 25 9.57 54.94 92.12 99.03
Depreciation 26 60.69 35.11 45.62 56.23
Interest 27 25.40 34.54 43.73 50.65
Profit before tax 28 322.61 603.21 840.48 1006.50
Tax 29 71.31 170.08 238.98 281.56
Net profit 30 251.30 433.12 601.35 725.38
Dividend Amount 31 66.58 55.49 155.36 186.44

Quarters 40 'Data Sheet'!A40:A999

41 Sep-17 Dec-17 Mar-18 Jun-18
Sales 42 3582.18 4363.08 4107.22 4451.03
Expenses 43 3160.30 3941.03 3673.63 3968.63
Other Income 44 20.47 21.32 12.77 36.13
Depreciation 45 31.03 34.92 35.95 40.74
Interest 46 14.52 10.92 16.71 10.89
Profit before tax 47 396.80 397.53 393.70 466.90
Tax 48 118.87 115.92 89.29 138.75
Net profit 49 283.85 287.96 315.04 328.15
Operating Profit 50 421.88 422.05 433.59 482.40

BALANCE SHEET 55 'Data Sheet'!A55:A999

Report Date 56 Mar-10 Mar-11 Mar-12 Mar-13
Equity Share Capital 57 44.39 44.39 88.78 88.78
Reserves 58 687.52 991.23 1372.14 1881.07
Borrowings 59 72.99 68.02 5.89 0.00
Other Liabilities 60 1300.27 2654.86 3243.10 3914.20
Total 61 2105.17 3758.50 4709.91 5884.05
Net Block 62 267.79 288.42 383.92 463.90
Capital Work in Progress 63 12.32 16.64 24.85 41.76
Investments 64 1.59 2.58 2.44 2.91
Other Assets 65 1823.47 3450.86 4298.70 5375.48
Total 61 2105.17 3758.50 4709.91 5884.05
Receivables 67 94.73 117.63 165.19 165.83
Inventory 68 1345.42 1998.12 2882.02 3680.33
Cash & Bank 69 197.30 1109.88 967.10 1139.04
No. of Equity Shares 70 44389308 44389308 887786160 887786000
New Bonus Shares 71 0.00 0.00 443893080.00 0.00
Face value 7 1.00 0.00 0.00 0.00

CASH FLOW: 80 'Data Sheet'!A80:A999

Report Date 81 Mar-09 Mar-10 Mar-11 Mar-12
Cash from Operating Activity 82 341.61 1053.32 162.63 552.96
Cash from Investing Activity 83 -31.80 -24.96 -69.85 -141.74
Cash from Financing Activity 84 -168.91 -116.84 -234.93 -235.62
Net Cash Flow 85 140.90 911.52 -142.15 175.60

PRICE: 90 92.05 190.54 228.60 256.50

DERIVED:
Adjusted Equity Shares in Cr 93 88.80 88.80 88.78 88.78

Graph Data:
P/L - Annual - YoY change Mar-09 Mar-10 Mar-11 Mar-12
Sales 4,782 6,588 8,941 10,222
Sales YoY 38% 36% 14%
EPS 2.8 4.9 6.8 8.2
EPS YoY 72% 39% 21%

Capex Calculation
Depreciation 35.11 45.62 56.23
New Assets 24.95 103.71 96.89
60.06 149.33 153.12

SSGR Calculation
SSGR = NFAT*NPM*(1-DPR) – Dep 118%
Dep = Depn rate as % of net fixed assets 13%
DPR=Dividend payout Ratio=Dividend paid/PAT 23%
NPM = Net Profit margin as % of sales 7%
NFAT = Sales/Average net fixed assets 2457%
Average net Fixed Assets 278.11 336.17 423.91
Average Equity 883.765 1248.27 1715.385
Return on average equity 35%
No. of Equity Shares 70 443893 443893 8877862 8877860
PRICE: 90 92.05 190.54 228.60 256.50
Current Price 8
Market Cap 408.6035801 845.7938746 20294.79162 22771.7109
Share Capital 731.91 1035.62 1460.92 1969.85
Debt 72.99 68.02 5.89 0.00
Profit 251.30 433.12 601.35 725.38
Enterprice Price (Equity+debt) 481.59 913.81 20300.68 22771.71
Book Value 731.91 1035.62 1460.92 1969.85

Rolling ROE calcuation

3 year return 428.59 586.62
3 year equity 1076.15 1488.796667
0.398262324 0.394020674
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 last 4 Qtr
10927.39 11913.41 11275.89 13260.83 16119.77 19778.52 21228.81
8151.28 8955.86 8372.17 9821.14 12664.83 15170.66
99.41 204.37 191.43 313.71 978.61 776.41
37.74 40.18 41.20 43.84 45.32 48.51
142.88 187.15 261.70 160.42 124.83 193.28
544.10 636.48 699.69 894.32 906.26 1024.44
824.41 833.49 846.43 1211.16 1277.81 1451.40
279.16 312.28 306.80 279.76 435.13 672.85 18930.12
117.32 66.81 69.33 -42.38 69.93 178.48 167.88
67.55 89.57 98.19 110.53 131.43 162.84 286.72
87.13 80.69 42.36 37.74 52.92 52.54 135.92
1009.87 1048.89 868.11 973.25 1529.78 1956.89 2043.93
275.12 232.64 191.59 275.97 427.87 568.24 546.04
734.94 816.26 674.52 711.47 1130.09 1404.15 1500.99
186.44 204.19 195.32 230.83 332.92 443.90 2298.69

Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19

4567.23 5871.49 4888.77 5151.09 4661.59 6527.36
4100.01 5280.35 4440.27 4578.59 4141.90 5769.36
27.90 62.62 56.36 57.08 31.75 22.69
42.79 38.47 40.84 75.95 82.20 87.73
13.49 15.67 12.49 33.85 44.86 44.72
438.84 599.62 451.53 519.78 424.38 648.24
137.73 188.53 103.23 156.04 112.73 174.04
305.91 413.19 348.30 363.74 314.33 474.62
467.22 591.14 448.50 572.50 519.69 758.00

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

88.78 88.78 88.78 88.78 88.78 88.78
2433.95 2995.09 3417.50 4143.60 5001.10 5981.37
806.84 99.79 113.05 1882.43 1691.01 2392.98
2781.26 2684.30 2722.58 2292.76 2740.15 3246.71
6110.83 5867.96 6341.91 8407.57 9521.04 11709.84
614.23 699.11 770.54 1188.72 1473.81 1566.63
32.87 55.19 106.71 152.07 43.37 31.77
3.09 3.10 30.41 430.73 35.99 108.42
5460.64 5110.56 5434.25 6636.05 7967.87 10003.02
6110.83 5867.96 6341.91 8407.57 9521.04 11709.84
154.13 189.73 192.50 207.60 295.69 420.45
 3869.39 4049.30 4447.15 4925.74 5924.84 7038.82
892.67 213.81 116.35 778.93 617.91 1066.48
887800000 887786160 887786160 887786160 887786160 887786160
0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

-554.72 502.60 576.09 1712.30 -51.12 1242.92
-271.24 -118.03 -158.79 -953.15 97.62 -796.61
497.38 -1004.65 -504.84 -165.60 -252.45 -488.83
-328.58 -620.08 -87.54 593.55 -205.95 -42.52

262.45 392.00 338.80 462.75 942.30 1141.85

88.78 88.78 88.78 88.78 88.78 88.78

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

11,045 11,980 11,345 13,218 16,190 19,957
8% 8% -5% 17% 22% 23%
8.3 9.2 7.6 8.0 12.7 15.8
1% 11% -17% 5% 59% 24%

67.55 89.57 98.19 110.53 131.43 162.84

141.44 107.20 122.95 463.54 176.39 81.22
208.99 196.77 221.14 574.07 307.82 244.06

105% 92% 72% 54% 47% 48%

13% 13% 13% 13% 11% 11%
26% 25% 26% 29% 30% 31%
7% 7% 7% 6% 6% 7%
2301% 2035% 1767% 1537% 1335% 1283%
539.07 656.67 734.83 979.63 1,331.27 1,520.22
2246.29 2803.3 3295.075 3869.33 4661.13 5580.015
27% 23% 18% 16% 13% 13%
 8878000 8877862 8877862 8877862 8877862 8877862 8877861.8
262.45 392.00 338.80 462.75 942.30 1141.85
890
23300.311 34801.21747 30078.1951 41082.30455 83656.08986 101371.8626796 79012.97
2522.73 3083.87 3506.28 4232.38 5089.88 6070.15 6070.15
806.84 99.79 113.05 1882.43 1691.01 2392.98 2392.98
734.94 816.26 674.52 711.47 1130.09 1404.15 1500.99
24107.15 34901.01 30191.25 42964.73 85347.10 103764.84 81405.95
2522.73 3083.87 3506.28 4232.38 5089.88 6070.15 6070.15

687.22 758.86 741.91 734.08 838.69 1081.90

1984.5 2525.483333 3037.626667 3607.51 4276.18 5130.80333333333
0.346295456 0.300481096 0.244238923 0.203487539 0.196131438 0.2108643155945
 Mar/10
Sales Growth
PBT Growth
Net Profit Growth
Basic Company Details Dividend Growth
Parameters Details Operating Cash Flow Growth
Company TITAN COMPANY LTD Free Cash Flow Growth
Current Stock Price (Rs) 890
Face Value (Rs) 1.0 Operating Margin 8.4%
No. of Shares (Crore) 88.8 PBT Margin 6.8%
Market Capitalization (Rs Crore) 79,013 Net Margin 5.3%

Key Financials - Trend Debtor Days 7.2

Parameters Details Inventory Turnover 3.5
Sales Growth (9-Year CAGR) 17.1% Fixed Asset Turnover 17.8
Profit Before Tax Growth (9-Year CAGR) 22.2% Debt/Equity 0.1
Net Profit Growth (8-Year CAGR) 21.1% Debt/Assets 3.5%
Average Debt/Equity (5-Years, x) 0.2 Interest Coverage (Times) 13.7
Average Return on Equity (5-Years) 21.4% Return on Equity 34.3%
Average P/E (5-Years, x) 59.0 Return on Capital Employed 43.2%
Latest P/E (x) 52.7 Free Cash Flow (Rs Cr) 342
 Key Ratios
0
Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17 Mar/18 Mar/19
36.9% 35.4% 14.4% 7.9% 9.0% -5.4% 17.6% 21.6% 22.7%
87.0% 39.3% 19.8% 0.3% 3.9% -17.2% 12.1% 57.2% 27.9%
72.4% 38.9% 20.5% 1.4% 11.1% -17.1% 3.1% 58.0% 26.0%
-16.7% 180.0% 20.0% 0.0% 9.5% -4.3% 18.2% 44.2% 33.3%
208.3% -84.6% 240.0% -200.3% -190.6% 14.6% 197.2% -103.0% -2531.4%
190.8% -98.7% 2906.3% -291.0% -140.0% 16.1% 220.7% -131.5% -378.3%

9.5% 9.5% 10.0% 9.6% 9.7% 8.3% 8.8% 10.2% 10.1%

9.2% 9.5% 9.9% 9.2% 8.8% 7.7% 7.3% 9.5% 9.9%
6.6% 6.8% 7.2% 6.7% 6.9% 6.0% 5.3% 6.8% 7.0%

6.6 6.8 6.0 5.1 5.8 6.2 5.7 6.7 7.8

3.3 3.1 2.8 2.8 2.9 2.5 2.7 2.7 2.8
22.7 23.0 21.8 17.8 17.0 14.6 11.2 10.9 12.6
0.1 0.0 - 0.3 0.0 0.0 0.4 0.3 0.4
1.8% 0.1% 0.0% 13.2% 1.7% 1.8% 22.4% 17.8% 20.4%
18.5 20.2 20.9 12.6 14.0 21.5 26.8 29.9 38.2
41.8% 41.2% 36.8% 29.1% 26.5% 19.3% 16.5% 21.6% 22.9%
57.8% 60.3% 53.7% 32.9% 35.5% 25.2% 16.5% 23.3% 23.7%
993 13 400 -764 306 355 1,138 -359 999
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.
12% Profit Margin
70%
Check
10% 60% Numb
8% 50% has ze
40%
6%
30%
4%
20%
2% Check for a rising trend and/or consistency. 10%
Compare with a close competitor
0% 0%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18 Jan/10

Operating Margin PBT Margin

Net Margin

25,000
Revenue R
100%
Check for a rising trend.
80%
20,000
60%
15,000
40%
10,000 20%
0%
5,000 Jan/1
-20%
- -40%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18

2,500 Profit Over Time 2,000 Che

Check for a rising trend.
2,000 1,500 whi
1,000
1,500
500
1,000
-
500 -500 Jan/
- -1,000
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18

PBT Net Profit

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

Management Effectiveness
Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16
ROE 34% 42% 41% 37% 29% 26% 19%
ROCE 43% 58% 60% 54% 33% 35% 25%

Revenue & Profit Growth

Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16 Mar/17
Revenue Growth 37% 35% 14% 8% 9% -5% 18%
PBT Growth 87% 39% 20% 0% 4% -17% 12%
Net Profit Growth 72% 39% 21% 1% 11% -17% 3%

Revenue & Profit

Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16
Revenue 4,773 6,533 8,848 10,123 10,927 11,913 11,276
PBT 323 603 840 1,007 1,010 1,049 868
Net Profit 251 433 601 725 735 816 677

Cash Flows
Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16
Operating Cash Flow 342 1,053 163 553 -555 503 576
Free Cash Flow 342 993 13 400 -764 306 355
 70%
Capital Allocation Quality
Check for a rising trend and/or consistency.
60% Numbers > 20% long term are good. Also check if the company
50% has zero/marginal debt. Compare with a close competitor Note: Please ignore the date
on the X-axis. The figures are
40% for/as on the year ending date
30% which for most Indian
companies would be 31st Marc
20% of that year
10%
0%
Jan/10 Jan/12 Jan/14 Jan/16 Jan/18

ROE ROCE 25,000

100% Revenue and Profit Growth (YoY) 20,000 38%

Check for a rising trend and/or low volatility. 36%
80% Compare growth rates with a close competitor.
15,000
60%
40% 10,000 1
20%
0% 5,000 8,941 10,22
6,588
Jan/11 Jan/13 Jan/15 Jan/17 Jan/19
-20%
-
-40% Jan-10 Jan-11 Jan-1

Revenue Growth PBT Growth Sales Sales YoY

Net Profit Growth

Operating and Free Cash Flow

2,000 Check for positive numbers and
1,500 which are rising over time.

1,000
500
-
-500 Jan/10 Jan/12 Jan/14 Jan/16 Jan/18

-1,000

Operating Cash Flow Free Cash Flow

Mar/17 Mar/18 Mar/19
9% 10% 10%
7% 9% 10%
5% 7% 7%

Mar/17 Mar/18 Mar/19

16% 22% 23%
17% 23% 24%

Mar/18 Mar/19
22% 23%
57% 28%
58% 26%

Mar/17 Mar/18 Mar/19

13,261 16,120 19,779
973 1,530 1,957
697 1,102 1,389

Mar/17 Mar/18 Mar/19

1,712 -51 1,243
1,138 -359 999
 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

25,000 50%

40%
20,000 38%
36%
30%
15,000
22% 23%
20%
17%
10,000 14% 19,957
16,190 10%
8% 8%
11,980 13,218
5,000 10,222 11,045 11,345
8,941 0%
6,588
-5%
- -10%
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18

Sales Sales YoY

 Common Size P&L
Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw Material Cost 73% 79% 82% 82% 75% 75% 74% 74% 79% 77%
Change in Inventory 2% 8% 8% 8% 1% 2% 2% 2% 6% 4%
Power and Fuel 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Other Mfr. Exp 1% 2% 1% 1% 1% 2% 2% 1% 1% 1%
Employee Cost 6% 6% 5% 5% 5% 5% 6% 7% 6% 5%
Selling and Admin Cost 10% 9% 8% 7% 8% 7% 8% 9% 8% 7%
Other Expenses 3% 2% 2% 2% 3% 3% 3% 2% 3% 3%
Operating Profit 4% -6% -8% -6% 8% 6% 5% 4% -2% 2%
Other Income 0% 1% 1% 1% 1% 1% 1% 0% 0% 1%
Depreciation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Interest 1% 1% 0% 1% 1% 1% 0% 0% 0% 0%
Profit Before Tax 7% 9% 9% 10% 9% 9% 8% 7% 9% 10%
Tax 1% 3% 3% 3% 3% 2% 2% 2% 3% 3%
Net Profit 5% 7% 7% 7% 7% 7% 6% 5% 7% 7%
Dividend Amount 1% 1% 2% 2% 2% 2% 2% 2% 2% 2%

Common Size Balance Sheet

Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Equity Share Capital 2% 1% 2% 2% 1% 2% 1% 1% 1% 1%
Reserves 33% 26% 29% 32% 40% 51% 54% 49% 53% 51%
Borrowings 3% 2% 0% 0% 13% 2% 2% 22% 18% 20%
Other Liabilities 62% 71% 69% 67% 46% 46% 43% 27% 29% 28%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Net Block 13% 8% 8% 8% 10% 12% 12% 14% 15% 13%
Capital Work in Progress 1% 0% 1% 1% 1% 1% 2% 2% 0% 0%
Investments 0% 0% 0% 0% 0% 0% 0% 5% 0% 1%
Other Assets 87% 92% 91% 91% 89% 87% 86% 79% 84% 85%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Receivables 4% 3% 4% 3% 3% 3% 3% 2% 3% 4%
Inventory 64% 53% 61% 63% 63% 69% 70% 59% 62% 60%
Cash & Bank 9% 30% 21% 19% 15% 4% 2% 9% 6% 9%
 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.
 Intrinsic Value Range
TITAN COMPANY LTD
Lower Higher
Remember! Give importance to a stoc
Dhandho 16,331 24,212
only "after" you have answered in "Yes
Ben Graham 20,821 33,684 (1) Is this business simple to be und
Ben Graham 2 20,667 33,377 understand this bus
DCF 13,493
Expected Return 28,083 Don't try to quantify everything. In stoc
Current Market Cap. 79,013 mathematical you are, the more simple
be your analysis and results. Great ana
the-envelope"

Also, your calculated "fair value" will

Explanation: Considering the above range, we can say that future, so don't invest your savings jus
Hero Moto's IV range is between Rs 55,000 crore to Rs with it. Don't look for perfection. It i
95,000 crore. It's a big range, but that's fine (who is looking decisions, not outcomes. Look for d
for precision?). Now, 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!
mber! Give importance to a stock's valuations / fair value
er" you have answered in "Yes" to these two questions -
this business simple to be understood? and (2) Can I
understand this business?

y to quantify everything. In stock research, the less non-

atical you are, the more simple, sensible, and useful will
analysis and results. Great analysis is generally "back-of-
the-envelope".

your calculated "fair value" will be proven wrong in the

so don't invest your savings just because you fall in love
it. Don't look for perfection. It is overrated. Focus on
ions, not outcomes. Look for disconfirming evidence.
 Dhandho Intrinsic Value Calculation
Read the book - The Dhandho Investor by Mohnish Pabrai

TITAN COMPANY LTD TITAN COMPANY 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 682 609 Year 4-6 10% 1 FY18
2 FY19 784 625 Year 7-10 5% 2 FY19
3 FY20 901 642 Discount Rate 12% 3 FY20
4 FY21 992 630 4 FY21
5 FY22 1,091 619 Last 5-Years' CAGR 5 FY22
6 FY23 1,200 608 Sales 13% 6 FY23
7 FY24 1,260 570 PBT 14% 7 FY24
8 FY25 1,323 534 FCF -206% 8 FY25
9 FY26 1,389 501 9 FY26
10 FY27 1,458 470 10 FY27
10 14,584 4,696 10
Intrinsic Value 16,331 Intrinsic Value
Current Mkt. Cap. 79,013 Current Mkt. Cap.
Premium/(Discount) to IV 384% 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 th
number. This number is your assumption of FCF the business will earn in a normal year, without capex. Check the history
business while arriving at your assumption, and use your judgment wisely without twisting the model to fit your version of r
Calculation
by Mohnish Pabrai

TITAN COMPANY 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%
711 635 Year 4-6 15%
854 680 Year 7-10 10%
1,024 729 Discount Rate 12%
1,178 749
1,355 769
1,558 789
1,713 775
1,885 761
2,073 748
2,281 734
34,209 11,015
Intrinsic Value 24,212
Current Mkt. Cap. 79,013
Premium/(Discount) to IV 226%

use a normalized positive FCF as the starting

, without capex. Check the history of this
ng the model to fit your version of reality.
 Ben Graham Formula (Low Range) Ben Graham Formula (High Range
Company Name TITAN COMPANY LTD Company Name
Year Ended Mar/19 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 936.1 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
Modified Long Term Growth Rate
Ben Graham Value (Rs Crore) 20,821 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 79,013 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)
TITAN COMPANY LTD
Mar/19

936.1
8.5
13.7

33,684
79,013

is the growth rate for the next 7-10 years

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 num
resent, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
 Dicounted Cash Flow Valuation
TITAN COMPANY LTD

Initial Cash Flow (Rs Cr) 593 13,493

79,013
Years 1-5 6-10 17%
FCF Growth Rate 15% 12%
Discount Rate 12%
Terminal Growth Rate 2%

Net Debt Level (Rs Cr) (3,436)

Year FCF Growth Present Value

1 682 15% 609
2 784 15% 625
3 901 15% 642
4 1,037 15% 659
5 1,192 15% 676
6 1,335 12% 676
7 1,495 12% 676
8 1,675 12% 676
9 1,876 12% 676
10 2,101 12% 676

Final Calculations
Terminal Year 2,143
PV of Year 1-10 Cash Flows 6,593
Terminal Value 6,900
Total PV of Cash Flows 13,493
Current Market Cap (Rs Cr) 79,013

Note: See explanation of DCF here

Valuation
TD

DCF Value (As calculated in cell B29)

Current Market Cap
DCF as % of Current Mkt Cap
 Expected Returns Model
TITAN COMPANY LTD
Particulars Mar/10 Mar/11 Mar/12 Mar/13 Mar/14 Mar/15 Mar/16
Net Profit (Rs Crore) 251 433 601 725 735 816 675
Net Profit Margin 0 0 0 0 0 0 0
Return on Equity 34% 42% 41% 37% 29% 26% 19%

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) 4,361
Current P/E (x) 56.3
Exit P/E in the 10th year from now (x, Estimated) 20.0
Esti. Market Cap (10th year from now; Rs Cr) 87,222
Cost of Capital/Discount Rate 12%
Discounted Value (Rs Cr) 28,083
Current Market Cap (Rs Cr) 79,013

Note: See explanation of this model here

el
Mar/17 Mar/18 Mar/19 CAGR (9-Yr) CAGR (5-Yr)
711 1,130 1,404 21% 14%
0 0 0
16% 22% 23%
COMPANY NAME TITAN COMPANY LTD
LATEST VERSION 2.10 PLEAS
CURRENT VERSION 2.10

META
Number of shares 88.78
Face Value 1.00
Current Price 890.00
Market Capitalization 79,012.97

PROFIT & LOSS

Report Date Mar-10 Mar-11 Mar-12 Mar-13
Sales 4,772.69 6,533.14 8,848.43 10,123.29
Raw Material Cost 3,496.18 5,191.67 7,290.97 8,307.32
Change in Inventory 115.12 498.65 750.75 813.15
Power and Fuel 17.73 21.63 25.52 33.84
Other Mfr. Exp 69.25 123.53 128.66 117.80
Employee Cost 279.01 371.77 400.81 493.48
Selling and admin 492.90 566.49 723.91 752.35
Other Expenses 133.61 138.78 191.60 217.30
Other Income 9.57 54.94 92.12 99.03
Depreciation 60.69 35.11 45.62 56.23
Interest 25.40 34.54 43.73 50.65
Profit before tax 322.61 603.21 840.48 1,006.50
Tax 71.31 170.08 238.98 281.56
Net profit 251.30 433.12 601.35 725.38
Dividend Amount 66.58 55.49 155.36 186.44

Quarters
Report Date Sep-17 Dec-17 Mar-18 Jun-18
Sales 3,582.18 4,363.08 4,107.22 4,451.03
Expenses 3,160.30 3,941.03 3,673.63 3,968.63
Other Income 20.47 21.32 12.77 36.13
Depreciation 31.03 34.92 35.95 40.74
Interest 14.52 10.92 16.71 10.89
Profit before tax 396.80 397.53 393.70 466.90
Tax 118.87 115.92 89.29 138.75
Net profit 283.85 287.96 315.04 328.15
Operating Profit 421.88 422.05 433.59 482.40

BALANCE SHEET
Report Date Mar-10 Mar-11 Mar-12 Mar-13
Equity Share Capital 44.39 44.39 88.78 88.78
Reserves 687.52 991.23 1,372.14 1,881.07
Borrowings 72.99 68.02 5.89
Other Liabilities 1,300.27 2,654.86 3,243.10 3,914.20
Total 2,105.17 3,758.50 4,709.91 5,884.05
Net Block 267.79 288.42 383.92 463.90
Capital Work in Progress 12.32 16.64 24.85 41.76
Investments 1.59 2.58 2.44 2.91
Other Assets 1,823.47 3,450.86 4,298.70 5,375.48
Total 2,105.17 3,758.50 4,709.91 5,884.05
Receivables 94.73 117.63 165.19 165.83
Inventory 1,345.42 1,998.12 2,882.02 3,680.33
Cash & Bank 197.30 1,109.88 967.10 1,139.04
No. of Equity Shares 44,389,308.00 44,389,308.00 ### ###
New Bonus Shares ###
Face value 10.00 10.00 1.00 1.00

CASH FLOW:
Report Date Mar-10 Mar-11 Mar-12 Mar-13
Cash from Operating Activity 341.61 1,053.32 162.63 552.96
Cash from Investing Activity -31.80 -24.96 -69.85 -141.74
Cash from Financing Activity -168.91 -116.84 -234.93 -235.62
Net Cash Flow 140.90 911.52 -142.15 175.60

PRICE: 92.05 190.54 228.60 256.50

DERIVED:
Adjusted Equity Shares in Cr 88.80 88.80 88.78 88.78
 PLEASE DO NOT MAKE ANY CHANGES TO THIS SHEET

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

10,927.39 11,913.41 11,275.89 13,260.83 16,119.77 19,778.52
8,151.28 8,955.86 8,372.17 9,821.14 12,664.83 15,170.66
99.41 204.37 191.43 313.71 978.61 776.41
37.74 40.18 41.20 43.84 45.32 48.51
142.88 187.15 261.70 160.42 124.83 193.28
544.10 636.48 699.69 894.32 906.26 1,024.44
824.41 833.49 846.43 1,211.16 1,277.81 1,451.40
279.16 312.28 306.80 279.76 435.13 672.85
117.32 66.81 69.33 -42.38 69.93 178.48
67.55 89.57 98.19 110.53 131.43 162.84
87.13 80.69 42.36 37.74 52.92 52.54
1,009.87 1,048.89 868.11 973.25 1,529.78 1,956.89
275.12 232.64 191.59 275.97 427.87 568.24
734.94 816.26 674.52 711.47 1,130.09 1,404.15
186.44 204.19 195.32 230.83 332.92 443.90

Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19

4,567.23 5,871.49 4,888.77 5,151.09 4,661.59 6,527.36
4,100.01 5,280.35 4,440.27 4,578.59 4,141.90 5,769.36
27.90 62.62 56.36 57.08 31.75 22.69
42.79 38.47 40.84 75.95 82.20 87.73
13.49 15.67 12.49 33.85 44.86 44.72
438.84 599.62 451.53 519.78 424.38 648.24
137.73 188.53 103.23 156.04 112.73 174.04
 305.91 413.19 348.30 363.74 314.33 474.62
467.22 591.14 448.50 572.50 519.69 758.00

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

88.78 88.78 88.78 88.78 88.78 88.78
2,433.95 2,995.09 3,417.50 4,143.60 5,001.10 5,981.37
806.84 99.79 113.05 1,882.43 1,691.01 2,392.98
2,781.26 2,684.30 2,722.58 2,292.76 2,740.15 3,246.71
6,110.83 5,867.96 6,341.91 8,407.57 9,521.04 11,709.84
614.23 699.11 770.54 1,188.72 1,473.81 1,566.63
32.87 55.19 106.71 152.07 43.37 31.77
3.09 3.10 30.41 430.73 35.99 108.42
5,460.64 5,110.56 5,434.25 6,636.05 7,967.87 10,003.02
6,110.83 5,867.96 6,341.91 8,407.57 9,521.04 11,709.84
154.13 189.73 192.50 207.60 295.69 420.45
3,869.39 4,049.30 4,447.15 4,925.74 5,924.84 7,038.82
892.67 213.81 116.35 778.93 617.91 1,066.48
### ### ### ### ### ###

1.00 1.00 1.00 1.00 1.00 1.00

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

-554.72 502.60 576.09 1,712.30 -51.12 1,242.92
-271.24 -118.03 -158.79 -953.15 97.62 -796.61
497.38 -1,004.65 -504.84 -165.60 -252.45 -488.83
-328.58 -620.08 -87.54 593.55 -205.95 -42.52

262.45 392.00 338.80 462.75 942.30 1,141.85

88.78 88.78 88.78 88.78 88.78 88.78

TITAN COMPANY LTD #REF!
SCREENER.IN
Narration Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Sales 3,582 4,363 4,107 4,451 4,567 5,871 4,889 5,151 4,662 6,527
% Growth YOY 27% 35% 19% 16% 2% 11%
Expenses 3,160 3,941 3,674 3,969 4,100 5,280 4,440 4,579 4,142 5,769
Operating Profit 422 422 434 482 467 591 449 573 520 758
Other Income 20 21 13 36 28 63 56 57 32 23
Depreciation 31 35 36 41 43 38 41 76 82 88
Interest 15 11 17 11 13 16 12 34 45 45
Profit before tax 397 398 394 467 439 600 452 520 424 648
PBT Margin 11% 9% 10% 10% 10% 10% 9% 10% 9% 10%
% Growth YOY 11% 51% 15% 11% -3% 8%
Tax 119 116 89 139 138 189 103 156 113 174
Net profit 284 288 315 328 306 413 348 364 314 475
% Growth YOY 8% 43% 11% 11% 3% 15%
OPM 12% 10% 11% 11% 10% 10% 9% 11% 11% 12%
 Balance Sheet
TITAN COMPANY LTD
Rs Cr Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Equity Share Capital 44 44 89 89 89 89 89 89 89 89
Reserves 688 991 1,372 1,881 2,434 2,995 3,418 4,144 5,001 5,981
Borrowings 73 68 6 - 807 100 113 1,882 1,691 2,393
Other Liabilities 1,300 2,655 3,243 3,914 2,781 2,684 2,723 2,293 2,740 3,247
Total 2,105 3,759 4,710 5,884 6,111 5,868 6,342 8,408 9,521 11,710

Net Block 268 288 384 464 614 699 771 1,189 1,474 1,567
Capital Work in Progress 12 17 25 42 33 55 107 152 43 32
Investments 2 3 2 3 3 3 30 431 36 108
Other Assets 1,823 3,451 4,299 5,375 5,461 5,111 5,434 6,636 7,968 10,003
Total 2,105 3,759 4,710 5,884 6,111 5,868 6,342 8,408 9,521 11,710

Working Capital 523 796 1,056 1,461 2,679 2,426 2,712 4,343 5,228 6,756
Debtors 95 118 165 166 154 190 193 208 296 420
Inventory 1,345 1,998 2,882 3,680 3,869 4,049 4,447 4,926 5,925 7,039
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 7 7 7 6 5 6 6 6 7 8
Inventory Turnover 4 3 3 3 3 3 3 3 3 3
Fixed Asset Turnover 17.8 22.7 23.0 21.8 17.8 17.0 14.6 11.2 10.9 12.6
Debt/Equity 0.1 0.1 0.0 - 0.3 0.0 0.0 0.4 0.3 0.4
Return on Equity 34% 42% 41% 37% 29% 26% 19% 16% 22% 23%
Return on Capital Employed 43% 58% 60% 54% 33% 35% 25% 17% 23% 24%
 Profit & Loss Account / Income Statement
TITAN COMPANY 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 4,773 6,533 8,848 10,123 10,927 11,913 11,276 13,261 16,120 19,779 21,229
% Growth YOY 37% 35% 14% 8% 9% -5% 18% 22% 23%
Expenses 4,374 5,915 8,011 9,109 9,880 10,761 10,337 12,097 14,476 17,785 18,930
Material Cost (% of Sales) 73% 79% 82% 82% 75% 75% 74% 74% 79% 77% Check for wide fluctuations in key
Power and Fuel 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% expense items. For manufacturing firms,
Other Mfr. Exp 1% 2% 1% 1% 1% 2% 2% 1% 1% 1% check their material costs etc. For
Employee Cost 6% 6% 5% 5% 5% 5% 6% 7% 6% 5% services firms, look at employee costs.
Selling and Admin Cost 10% 9% 8% 7% 8% 7% 8% 9% 8% 7%
Operating Profit 399 618 838 1,014 1,047 1,152 939 1,164 1,644 1,994 2,299
Operating Profit Margin 8% 9% 9% 10% 10% 10% 8% 9% 10% 10% 11%
Other Income 10 55 92 99 117 67 69 -42 70 178 168
Other Income as % of Sales 0.2% 0.8% 1.0% 1.0% 1.1% 0.6% 0.6% -0.3% 0.4% 0.9% 0.8%
Depreciation 61 35 46 56 68 90 98 111 131 163 287
Interest 25 35 44 51 87 81 42 38 53 53 136
Interest Coverage(Times) 14 18 20 21 13 14 21 27 30 38 16
Profit before tax (PBT) 323 603 840 1,007 1,010 1,049 868 973 1,530 1,957 2,044
% Growth YOY 87% 39% 20% 0% 4% -17% 12% 57% 28%
PBT Margin 7% 9% 9% 10% 9% 9% 8% 7% 9% 10% 10%
Tax 71 170 239 282 275 233 192 276 428 568 546
Net profit 251 433 601 725 735 816 677 697 1,102 1,389 1,498
% Growth YOY 72% 39% 21% 1% 11% -17% 3% 58% 26%
Net Profit Margin 5% 7% 7% 7% 7% 7% 6% 5% 7% 7% 7%
EPS 2.8 4.9 6.8 8.2 8.3 9.2 7.6 7.9 12.4 15.6 16.9
% Growth YOY 72% 39% 21% 1% 11% -17% 3% 58% 26%
Price to earning 32.5 39.1 33.7 31.4 31.7 42.6 44.5 58.9 75.9 73.0 52.7
Price 92 191 229 257 262 392 339 463 942 1,142 890
Dividend Payout 26.5% 12.8% 25.8% 25.7% 25.4% 25.0% 29.0% 32.4% 29.5% 31.6%
Market Cap 8,174 16,920 20,295 22,772 23,300 34,802 30,079 41,083 83,657 ###
Retained Earnings 185 378 446 539 548 612 481 471 777 950
Buffett's $1 Test 17.3

72% 39% 21% 1% 11% -17% 3% 58% 26%

TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS
Sales Growth 17.1% 12.2% 12.6% 20.6%
PBT Growth 22.2% 12.8% 14.1% 31.1%
PBT Margin 8.8% 8.9% 8.6% 8.9%
Price to Earning 46.3 51.2 59.0 69.3

Check for long term vs short term trends here. Check if the growth over
past 3 or 5 years has slowed down / improved compared to long term (7 to
10 years) growth numbers.
 Cash Flow Statement
TITAN COMPANY 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) 342 1,053 163 553 -555 503 576 1,712 -51 1,243 5,539
% Growth YoY 208% -85% 240% -200% -191% 15% 197% -103% -2531%
Cash from Investing Activity -32 -25 -70 -142 -271 -118 -159 -953 98 -797 -2,469
Cash from Financing Activity -169 -117 -235 -236 497 -1,005 -505 -166 -252 -489 -2,675
Net Cash Flow 141 912 -142 176 -329 -620 -88 594 -206 -43 395
CFO/Sales 7% 16% 2% 5% -5% 4% 5% 13% 0% 6%
CFO/Net Profit 136% 243% 27% 76% -75% 62% 85% 246% -5% 90%
Capex** - 60 149 153 209 197 221 574 308 244
FCF 342 993 13 400 -764 306 355 1,138 -359 999 3,423
Average FCF (3 Years) 593
FCF Growth YoY 191% -99% 2906% -291% -140% 16% 221% -132% -378%
FCF/Sales 0 0 0 0 -0 0 0 0 -0 0
FCF/Net Profit 1 2 0 1 -1 0 1 2 -0 1
 Ben Graham Formula (Low Range) Ben Graham Formula (High Range
Company Name TITAN COMPANY LTD Company Name
Year Ended Mar/19 Year Ended

Avg 5-Yr Net Profit (Rs Crore) 936.1 Avg 5-Yr Net Profit (Rs Crore)
PE Ratio at 0% Growth 8.5 PE Ratio at 0% Growth
Long-Term Growth Rate 6.8 Long-Term Growth Rate
Modified Long Term Growth Rate
Ben Graham Value (Rs Crore) 20,667 Ben Graham Value (Rs Crore)
Current Market Cap (Rs Crore) 79,013 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)
TITAN COMPANY LTD
Mar/19

936.1
8.5
13.6

33,377
79,013

is the growth rate for the next 7-10 years

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 num
resent, we divide this number by today’s AAA corporate bond rate, represented by Y in the formula above.
 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

Consistent Compounders

bajaj finance
asian paints
hdfc bank
kotak mahindra
pidilite
ITC
Page industries
abbott india
nestle
lal path lab

relaxo
divis
eicher
bajaj auto
naukri
titan
Ambit/Old CC

axis bank
icici bank
marico
bata
v-guard
wonderla

cadila
tcs
tech mahindra
godrej consumer
emami
lic housing finance
pnb housing finance
motherson sumi
eclerx
amara raja
sun tv
zee tv
cera

Little Champions

caplin point
alkyl amines
mas financial services
gmm pfaudler
lumax industries
ppap
v-mart
ultramarine
dcb bank
garware fibers
la opala
sterling tools
astral polyteknik
suprajit
radio city

Utility Value
RECLTD
NMDC
NALCO
PFC
NTPC
BEL

MOIL
Castrol

power grid
cochin shipyard
SBI
 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.

1900
1400
850
1100
1259
160
17000
13000
13000
1250

530
1850
14000
2100
1800
800
 350
290
250
1050
150
110

240
1600
500
500
160
200
150
56
350
400
300
120
1700

300
1500
450
1900
750
120
1400
120
62
1200
130
110
700
105
13
 85
60
26
75
75
55

90
100

130
220
150
high valuation at close to 1500, look at closer to 1250

grossly overvalued at 700, can consider at 530

fair price

MASSIVE OVERVALUATION AT 2100

NOT TRACKING
massive overvaluation at 3100
NOT TRACKING
look at it at 120 only. Massively overvalued at 165
massive overvaluation at 1600, look at it 3-digits only

NOT TRACKING
MASSIVE OVERVALUATION AT 850