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Module 13 · Case Studies

What this module does. Puts everything from Modules 00–12 to work on 25 real decisions — ten global and fifteen Indian — each frozen at a date when a thoughtful investor had to act with only the information then public. You read the scene and the numbers, answer the questions before reading what happened, and then compare your reasoning with the outcome, the model answers and the signals that were knowable at the time.

Why it matters. Frameworks are easy to agree with and hard to apply. Cases are where you find out whether you can spot a fictitious cash balance, price a tax risk, value a lender, survive a cyclical trough or resist a great company at a bad price — with a real share price in front of you and no hindsight. They are also the fastest way to build pattern recognition: the same handful of mistakes and signals recur across countries and decades.

How to use a case

  1. Respect the decision date. Sections 1–3 contain only what was public at the time. Do not look up the company.
  2. Answer section 3 in writing, with numbers, before reading on. Time-box it (the "Time" row gives a guide; about half of it goes on sections 1–3). Use the course tools (fi.valuation, fi.forensics) or a spreadsheet.
  3. Write a decision-journal entry (11.6): buy, avoid or short; size; confidence; what would change your mind. Keep it — the casebook template works.
  4. Read section 4 (what happened) and section 5 (knowable vs hindsight) and score yourself honestly: right for the right reasons, right for the wrong reasons, wrong for the right reasons, or wrong.
  5. Only then open the model answers (section 7). Where your numbers differ, find out why.
  6. Do one discussion question from section 8; several point to a live company you can analyse today.

Two decision points

Many Indian cases have two decision dates (A and B) years apart, often at opposite ends of a cycle or a re-rating. Do decision A completely — including your journal entry — before reading decision B's scene.

The 25 cases

Global

# Case Period Decision date(s) Main themes Difficulty Time
G1 See's Candies (1972) 1971–2014 Dec-1971 Pricing power, capital-light compounding, return on incremental capital ★★☆ 2.5 h
G2 Buffett buys Coca-Cola (1988) 1981–2014 31-Jan-1989; 15-Jul-1998 Moat + reinvestment + fair price; owner earnings; valuation risk in great companies ★★☆ 2.5 h
G3 Cisco at the dot-com peak (2000) 1995–2026 27-Mar-2000 Reverse DCF of a bubble; great company ≠ great investment ★★★ 3 h
G4 Enron (2001) 1996–2013 2-Apr-2001 Mark-to-market earnings, SPEs, cash flow ≠ earnings, gatekeepers ★★★★ 3–4 h
G5 Amazon (1997–2015) 1997–2015 19-Apr-2002 Negative working capital, FCF vs EPS, long-duration value ★★★ 3.5 h
G6 Lehman Brothers (2008) 2003–2025 16-Jun-2008 Leverage, Level 3, repo funding, liquidity vs solvency ★★★★ 3.5 h
G7 Nokia & BlackBerry (2007–2013) 2007–2016 30-Jun-2011 Moat erosion, platform shifts, value traps ★★★ 3 h
G8 Valeant (2015) 2010–2026 5-Aug-2015 Roll-up economics, adjusted metrics, debt, short sellers ★★★★ 3 h
G9 Wirecard (2020) 2014–2026 31-Dec-2019 Cash that cannot be verified, third-party profits, auditor and regulator failure ★★★★ 3 h
G10 Buffett buys Apple (2016) 2013–2026 16-May-2016 Consumer franchise vs "hardware"; buybacks; re-rating; trimming a winner ★★★ 2.5 h

India

# Case Period Decision date(s) Main themes Difficulty Time
I1 Satyam Computer Services (2009) 2004–2018 6-Jan-2009 Fictitious cash, the interest-income test, related-party deals, pledges ★★★ 2.5 h
I2 Asian Paints 2002–2026 31-Mar-2011; 31-Mar-2022 Distribution moat, working capital, quality at a price, a funded entrant ★★★ 3 h
I3 Bajaj Finance 2007–2026 20-May-2010; 31-Mar-2019 RoA × leverage, credit cost, cross-sell, P/B as a forecast of RoE ★★★ 3 h
I4 IL&FS and DHFL (2018–2019) 2009–2026 31-Aug-2018; 24-Sep-2018 ALM mismatch, CP rollover, rating lag, debt-fund contagion ★★★★ 3 h
I5 Yes Bank (2018–2020) 2013–2026 20-Aug-2018; 31-Dec-2019 NPA divergence, concentrated lending, AT1, bail-out ★★★★ 3 h
I6 Eicher Motors (2009–2019) 2005–2026 15-Feb-2010; 31-Oct-2017 Focus, operating leverage, re-rating and de-rating ★★★ 3 h
I7 HDFC Bank (1995–2024) 2000–2026 26-Apr-2010; 4-Apr-2022 Consistency premium, deposit franchise, merger arithmetic ★★★ 3 h
I8 Zomato & Paytm IPOs (2021) 2019–2026 14-Jul-2021; 8-Nov-2021 Valuing loss-making platforms, unit economics, regulatory risk ★★★ 3 h
I9 Adani–Hindenburg (2023) 2016–2026 27-Jan-2023 Reading a short report; allegation vs finding; leverage and pledges ★★★★ 3 h
I10 Vodafone Idea & the telecom war 2012–2026 6-Sep-2016; 24-Oct-2019 Capital cycle, price war, spectrum and AGR as debt ★★★★ 3 h
I11 Kingfisher & Jet Airways 2006–2026 8-Apr-2011; 28-Aug-2018 RASK vs CASK, leases, leverage, lender "premiums" ★★★ 3 h
I12 ITC 2013–2026 30-Oct-2020; 14-Aug-2023 Cheap for a reason?, SOTP, sin-tax risk, payout, demerger ★★★ 3 h
I13 Avenue Supermarts / DMart 2012–2026 21-Mar-2017; 14-Oct-2021 EDLC/EDLP, owned stores and ROCE, the most expensive share ★★★ 3 h
I14 Manpasand & Vakrangee (2017–2018) 2014–2026 25-Jan-2018 Small-cap red flags, auditor resignations, sizing under Amber evidence ★★★ 2.5 h
I15 Tata Motors & JLR 2004–2026 9-Mar-2009; 11-Feb-2019 Cyclical troughs, acquisition leverage, currency, demerger ★★★ 3 h

Theme × case matrix

● = a central theme of the case; ○ = a secondary theme.

Case Fraud & forensics Lenders, ALM & credit Moats & compounding Valuation vs price Capital cycle & competition Governance & promoters Regulation & policy Special situations & restructuring Cycles & macro Loss-making growth
G1 See's ● ● ○
G2 Coca-Cola ● ●
G3 Cisco ○ ○ ● ● ●
G4 Enron ● ○ ○ ● ○
G5 Amazon ● ● ●
G6 Lehman ○ ● ○ ○ ○ ●
G7 Nokia/BB ● ● ●
G8 Valeant ● ○ ● ● ●
G9 Wirecard ● ○ ● ●
G10 Apple ● ● ○
I1 Satyam ● ○ ● ○ ○
I2 Asian Paints ● ● ● ○
I3 Bajaj Finance ● ● ● ○ ○ ○
I4 IL&FS/DHFL ○ ● ● ● ○ ●
I5 Yes Bank ○ ● ○ ● ● ●
I6 Eicher ● ● ● ○ ○
I7 HDFC Bank ● ● ● ○ ○ ●
I8 Zomato/Paytm ○ ● ● ● ○ ●
I9 Adani ○ ○ ● ● ●
I10 Vodafone Idea ○ ○ ● ● ● ● ●
I11 Kingfisher/Jet ○ ○ ● ● ● ○ ● ●
I12 ITC ● ● ○ ● ●
I13 DMart ● ● ●
I14 Manpasand/Vakrangee ● ● ● ○ ○
I15 Tata Motors ○ ● ○ ○ ● ●

Patterns across cases

  1. Cash earns interest; check the yield. Satyam's ₹5,000 crore and Wirecard's €2 billion of "cash" earned far less than the deposits they supposedly were. The yield test takes two minutes. → I1 · G9 · 09.4
  2. Companies with surplus cash do not borrow — and their promoters do not pledge everything. Satyam borrowed while "cash-rich"; Wirecard kept raising debt and a convertible; Satyam's and several other promoters' pledges were margin-called. → I1 · G9 · I9
  3. Find where the profit comes from. Enron's mark-to-market gains, Valeant's "cash EPS", Wirecard's third-party acquirers, Vakrangee's low-margin revenue surge and Jet's asset-sale "other income" each hid how little the core business earned. → G4 · G8 · G9 · I11 · I14
  4. Liquidity kills before solvency. Lehman, IL&FS and DHFL, Jet Airways and Tata Motors in 2009 all faced the same question — can the debt due in the next twelve months be rolled? The asset side decided who deserved to survive; the liability side decided who did. → G6 · I4 · I11 · I15 · I3
  5. A great company is not a great investment at any price. Cisco at 230× earnings, Coca-Cola in 1998, Asian Paints at 97× and DMart at its peak all delivered business growth and poor or negative returns for years. → G3 · G2 · I2 · I13
  6. Decompose every past return into earnings growth and re-rating. Asian Paints' 25% a year (2011–22), Bajaj Finance's 62% (2010–19) and ITC's 47% (2020–23) came roughly half to two-thirds from re-rating — the part that cannot repeat and often reverses. → I2 · I3 · I12 · G10
  7. High returns attract capital; the capital cycle eventually arrives. Jio in telecom, Birla Opus in paints, IndiGo in aviation, Juniper against Cisco, the iPhone against Nokia and BlackBerry. The announcement usually comes years before the damage — and the stock often ignores it. → I10 · I2 · I11 · G7
  8. Gatekeepers certify what they test. Big Four auditors (Satyam, Wirecard, Vakrangee, Manpasand), rating agencies (IL&FS, Enron), regulators (BaFin) and governance awards all failed to catch problems outside their procedures. An auditor's resignation is the most important governance signal in Indian small caps. → I1 · G9 · I4 · I14
  9. At the trough, value the troubled piece by subtraction. Tata Motors in 2009 priced JLR's equity near zero; Nokia's patents and net cash set a floor; ITC's cigarette business was priced at 6.5× EBITDA once the rest was valued. → I15 · G7 · I12
  10. Lenders are RoA × leverage, and the equity owns the variance of credit cost. Bajaj Finance, HDFC Bank, Yes Bank and DHFL differ less in their stated strategy than in how their credit cost and funding behaved under stress. → I3 · I7 · I5 · I4
  11. Allegations are not findings — in either direction. Hindenburg's allegations against Adani, the claims against Vakrangee's trading and the promoters of Jet and Kingfisher each led to different official outcomes. Precision about what was found protects you from over- and under-reacting. → I9 · I14 · I11
  12. Size for the tail you cannot hedge. Governance jumps, tax changes, regulatory orders and operational shocks (a cyberattack at JLR, the RBI's embargo on Bajaj Finance, the excise on ITC) sit outside most models. The answer is position size, not prediction. → 11.4

Suggested tracks

Track Order Why
Forensics I1 → G9 → G4 → I14 → G8 → I9 From the simplest fictitious-cash test to reading a contested short-seller report
Lenders I3 → I7 → I5 → I4 → G6 Build lender economics on a winner, then study the failures
Quality & price G1 → G2 → I2 → I13 → G3 → G10 Great businesses at good, fair and absurd prices
Cycles & balance sheets I15 → I11 → I10 → G6 → I6 Leverage, operating leverage and the capital cycle
India-first I1 → I3 → I2 → I12 → I4 → I14 → I15 → I9 One pass through the Indian market's main lessons
Growth & new economy G5 → I8 → G7 → I6 Valuing loss-making or fast-changing businesses

Connections

You're ready to move on when you can…

  • Work a case from the scene to a written decision with a size and a journal entry, without looking ahead.
  • Run the interest-income, borrowing and "where does the profit come from" tests on any company in 30 minutes.
  • Reverse-engineer what a price implies (growth, RoE, the value of a troubled segment) and say whether it can happen.
  • Decompose a historical return into earnings growth, re-rating and dividends.
  • Tell a liquidity problem from a solvency problem, and a cyclical trough from a structural decline.
  • State precisely what regulators and courts have found in a contested case, and what remains alleged.
  • Explain, for any case, which signals were knowable at the time and which only in hindsight.

Tested by: the final exam (a timed case) and the stock-pitch mock.

Exercises · Solutions