Methodology
Every number on the site is computed by our own code. This page lists the source and the rule for each kind of number, so you can check any of them yourself.
Prices
Daily open, high, low, close and volume come from the NSE and BSE end-of-day files, back to 2006 for NSE. Charts and returns use prices adjusted for splits and bonuses, so a 1:1 bonus does not look like a 50% crash. Each split or bonus is applied on its ex-date using the factor in the corporate action; where an action is missing from the exchange file but the price clearly re-based (a one-off overnight fall of more than 28% that lands on a clean ratio and does not rebound), the factor is inferred and marked.
Financial statements
Annual and quarterly profit and loss, balance sheet and cash flow come from company filings, compiled per company and standardised to the same line items. When a company files new quarterly results with the NSE, we parse the official XBRL filing the same evening and show that quarter before other sources catch up; the page says when a figure came from the exchange filing. Figures are consolidated where the company reports consolidated accounts, otherwise standalone. Amounts are in Rs crore.
Ratios
More than 100 ratios are calculated from those statements, with these conventions:
- Trailing twelve months (TTM) uses the last four reported quarters; if quarters are older than the latest annual report, the annual figure is used.
- Returns on equity and capital use the average of opening and closing balances.
- P/E is market capitalisation divided by TTM net profit; it is left blank when profit is negative.
- Valuation bands compare today's P/E and P/B with the company's own monthly history, using only the profit and book value it had reported by each month.
Red flags and F-score
Each company gets ten statement checks on its latest reported years, plus checks on its exchange announcements from the last twelve months. Severity is "look", "explain" or "serious".
| Check | Rule |
|---|---|
| Weak cash conversion | Operating cash flow under 50% of net profit over three years |
| High accruals | Profit exceeds operating cash by more than 10% of total assets |
| Receivables outrunning sales | Receivables growth more than 25 points above sales growth |
| Inventory outrunning sales | Inventory growth more than 30 points above sales growth |
| Share dilution | Share count up 10% in a year or 25% in three (splits and bonuses excluded) |
| Debt up, profit down | Borrowings up more than 30% while net profit fell |
| Low interest cover | Profitable company with debt above 10% of assets and interest cover under 1.5x |
| Negative equity | Shareholders' equity below zero |
| Profit leans on other income | Other income above 40% of pre-tax profit |
| Repeated losses | Net loss in each of the last two years |
Announcement checks cover auditor resignations, exits of the CEO, CFO, managing director or company secretary, insolvency proceedings, regulator orders, the NSE pledge list and NSE surveillance measures.
The F-score runs eight of Piotroski's nine tests (return on assets, operating cash flow, change in return on assets, cash flow above profit, change in leverage, no dilution, change in operating margin, change in asset turnover). The current-ratio test is left out because Indian statements do not split current items consistently. Higher is healthier; it is shown only when at least six tests have the data they need.
Screen backtest
Every July the screen runs on the numbers a reader could have known that day: the latest annual report whose year ended at least 60 days earlier, priced at that day's close. Picks are held for one year with equal weight. Returns are price only, before costs and taxes.
IPOs
Issue facts (dates, price band, lot, issue size, subscription) are the published issue details. Everything after listing is calculated by us from the exchange's daily prices: listing-day open and close against the issue price, then returns at one week, one month, six months, one year and today, adjusted for later splits and bonuses, and compared with the Nifty 50 over the same days. A listing is used only when the company's first trade falls within 30 days of the issue closing.
What changed
The change feed collects company events every evening from exchange announcements, the surveillance lists, bulk and block deals, takeover-code disclosures, price moves of 10% or more, new 52-week highs and lows, results with a large profit swing, and red flags that newly appear. Each event is ranked by severity times company size.
Corrections
Spotted a wrong number? Email [email protected] with the company and the figure. See also the disclaimer.
Our quarterly estimates and results surprise
India has no free analyst consensus, so we estimate each company's next quarterly sales and net profit ourselves, using only quarters it had already reported. Sales: the same quarter last year, grown at the median year-on-year rate of the two latest quarters (capped between -40% and +60%). Profit: that sales estimate times the median net margin of the last four quarters. We tested these against simply repeating last year's quarter on 17,576 past company-quarters: the median error is 11.1% for sales (versus 16.1%) and 40.1% for profit (versus 47.4%). Profit is hard to forecast; treat the estimate as a rough yardstick.
A result is a beat or miss relative to how noisy that company usually is: the gap between actual and estimate divided by the spread of its own year-on-year changes. Big beat means at least two times that spread above the estimate, big miss two times below. The results surprise study shows how prices moved against the Nifty 50 after each kind of surprise.