If we consider that a DCF is a Linear Equation, we could say the 'X' (The unknown variable) is the Intrinsic Value.

In a Reverse DCF, we start with the Market Price and try to find some other variable, say Sales Growth.

All investors can do this with a handy tool: The Reverse DCF.

I'll also leave a download link to my compact DCF Model at the end of this thread.

If we consider that a DCF is a Linear Equation, we could say the 'X' (The unknown variable) is the Intrinsic Value.

In a Reverse DCF, we start with the Market Price and try to find some other variable, say Sales Growth.

I valued them on my blog a while ago. I'll be retaining the old assumptions, but using the latest financials.

So please note that the Valuation isn't accurate now.

https://t.co/dfK3idroWA

The Intrinsic Value is Rs. 3,012, but the Market Price is Rs. 3,492.

Let's not dwell on whether this is correct, since we discussed earlier that this isn't an accurate Valuation.

I will now remove the Sales Growth numbers from the Model and assume that Sales Growth is the same across the years for ease of calculation.

We can do a manual trial and error. But an easier option is to use the MS Excel Solver Add-in. Here's a short tutorial from Microsoft:

https://t.co/LLr3lzlRoK

When I click 'Solve', Solver will auto-populate the Sales Growth number.

Click 'Ok' to retain Solver's solution.

You can also revert back to the old numbers if you wish.

Now the difficult question to answer is "Can VST Industries grow Sales at 10.90% for 20 years?"

Personally, that's close to the Sustainable Growth Rate and offers no Margin of Safety. This confirms the result of my "Regular DCF" too.

As promised, here's my 'Compact DCF' Model: https://t.co/XqdfGx54pS

It's free. So, I'd appreciate it if you liked and re-tweeted this thread.

I completely agree that CDSL is a business that produces ample amount of Free Cash. So, it begs the question: "What are they doing with all that cash?" Generally, firms can utilize the cash on their books in 4 ways: Dividends, Acquisitions, Capex/Investments and Buybacks. (2/11)

CDSL does have a Dividend Payout Ratio of ~35-40%. But Dividends are the least efficient way of utilizing cash, due to the Triple Taxation on Dividends. More

Handled well, Inorganic Growth is so lucrative that some companies build their business models around acquisitions (Say, MSSL or Cyient). However, CDSL literally CAN'T be one such company. Read 7 (c) of the below regulatory document to know more:

https://t.co/071lwnnwJ4

(4/11)

CDSL can also reinvest cash into their own business, like most companies do. But CDSL (And most Exchanges) have little need for Capex/Reinvestment. CDSL's IPO came in at Rs. 523.99 Crores. Two years in, the Cash and Investments on their books stands at Rs. 650 Crores. (5/11)

There’s nothing in the Agile Manifesto or Principles that states you should never have any idea what you’re trying to build.

You’re allowed to think about a desired outcome from the beginning.

It’s not Big Design Up Front if you do in-depth research to understand the user’s problem.

It’s not BDUF if you spend detailed time learning who needs this thing and why they need it.

It’s not BDUF if you help every team member know what success looks like.

Agile is about reducing risk.

It’s not Agile if you increase risk by starting your sprints with complete ignorance.

It’s not Agile if you don’t research.

Don’t make the mistake of shutting down critical understanding by labeling it Bg Design Up Front.

It would be a mistake to assume this research should only be done by designers and researchers.

Product management and developers also need to be out with the team, conducting the research.

Shared Understanding is the key objective

Big Design Up Front is a thing to avoid.

Defining all the functionality before coding is BDUF.

Drawing every screen and every pixel is BDUF.

Promising functionality (or delivery dates) to customers before development starts is BDUF.

These things shouldn’t happen in Agile.