Financial Modeling Methodology

Stock Picker employs an institutional quantitative framework designed for maximum transparency, mathematical rigor, and conservative margin safety.

1. Conservative Range Lower-Bound Rule

Whenever concall transcripts or management commentary specify metric ranges (e.g. "EBITDA margins will hold between 22% to 24%" or "Top-line growth of 30% to 35%"), Stock Picker automatically selects the conservative lower bound (22.0% OPM, 30.0% Revenue Growth).

2. Absolute-Value Base Negative Growth Formula

For companies with historical losses (such as turnaround pharmaceuticals or capital goods firms), standard software often fails when evaluating negative prior-year base numbers. Stock Picker utilizes the absolute denominator formula:

This ensures that loss reduction (e.g. -621 Cr to -472 Cr) is correctly reported as a +24.0% improvement, and turnarounds into positive profitability (e.g. -57 Cr to +199 Cr) reflect full growth momentum.

3. Turnaround OPM Protection & Non-Linear Costs

When a company's latest operating margin exceeds its 3-year historical average (margin turnaround), baseline OPM is protected against historical drag. Debt interest and depreciation expenses are modeled independently of revenue volume based on balance-sheet debt schedule and capital expenditures.