Methodology

Long Term : FVD ModelMethodology
F : Fundamentals For last 10 years' annual data, below ratios/parameters are analyzed for
Consistency, Trend and Growth rate :
ROCE
ROE
ROIC
Revenue Growth
Profit Margins
Company Size

The final score is compared with the score of all the other listed stocks and given a relative rating out of 10.
Good = Relative Score >= 6
Average = Relative Score >= 4 and <6
Bad = Relative Score < 4
V : Valuation Three ratios are considered for current valuation of the company:
1. EV to EBIDTA
2. EV to Sales
3. Price to Sales

Last 10 years' median value for all 3 ratios is assumed to be the fair value of the company.
Basis this assumption, the present fair value is calculated by all 3 ratios.
The median of these 3 ratios is compared with all the other listed stocks and given a relative rating out of 10.
Good = Relative Score >= 6
Average = Relative Score >= 4 and <6
Bad = Relative Score < 4
D : Debt Average Debt/Equity ratio of the last 3 years is considered for calculating this Rating

For Banking industry,
Good = Ratio less than 13
Average = Ratio between 13 and 15
Bad = Ratio greater than 15

For all non-Banking industries,
Good = Ratio less than 0.4
Average = Ratio between 0.4 and 0.6
Bad = Ratio greater than 0.6
Short Term - QPP ModelMethodology
Q : Quarterly Earnings Trend 1Qtr and 4Qtr growth in Revenue, Operating Profit and NetIncome are considered for this rating.

The growth rate score are assigned as under:
If ratio's 1Q growth is +ve, then 1. If -ve, then -1.
If ratio's 4Q growth is +ve, then 1.If -ve, then -1.
Growth Score= Sum of all the above scores for Revenue, Operating Profit and Net Income.

Interpretation
Good = Growth Score >=4
Neutral = Growth Score between 0 and 4
Bad = Growth Score less than 0
P : Price Momentum 1 Month Sharpe Ratio is considered for this Rating :
If greater than 2, then Good
If between 0 and 2, then Neutral
If less than 0, then Bad
P : Pledged Shares Current Pledged Shares are considered for this rating:
If less than 25% ,then Good
If between 25% and 50%, then Neutral
If greater than 50%,then Bad.
All Stocks : A - Z
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