Skip to content

Mock 6 — Stock-pitch mock

Take after: Module 11 (week 18 of the study plan); repeat it on a new company after the final exam. Time: one week of research (budget ~10 hours), then a 5-minute pitch and 10 minutes of questions. Marks: 100, on the rubric below. Pass: 70.

The earlier mocks test whether you can do the pieces. This one tests whether you can put them together into a decision that another person can check. It is the dress rehearsal for the capstone.

The task

  1. Pick a company. Take any listed Indian company with a market cap above ₹2,000 Cr that is not one of the course's case studies. Once you have sat Mock 5, Kabini is also allowed for a first attempt. Avoid anything you already own, so that you are not defending a position.
  2. Research it. Use the process in 11.2:
  3. read the last three annual reports and the last four quarterly results and call transcripts;
  4. read the credit-rating rationales and the shareholding pattern;
  5. build a model to the standard of 10.4;
  6. run the forensic checklist.
  7. Produce three things.
  8. A two-page memo in the structure of 11.3.
  9. A one-page model summary: drivers, a three-scenario valuation, the reverse DCF and a sensitivity table.
  10. A five-minute spoken pitch, with no more than five slides or none at all.
  11. Present and defend. Pitch to a friend, a study partner or a camera. Then take ten minutes of questions from the question bank; ask your partner to pick them at random. If you are alone, record yourself, draw eight questions blind and answer them on camera.
  12. Score yourself on the rubric, then have your partner score you. Where the two scores differ by more than two points on a criterion, that criterion is the one to work on.

Rules.

  • Date-stamp the price and every data point.
  • Cite a source for every number that is not from your own model.
  • Say whether you own the stock.
  • Write the memo yourself. Using AI tools to draft it defeats the purpose of the exercise.
  • "I don't know" is an acceptable answer in the Q&A; a made-up number is not.

Rubric

Score each criterion 1–5 (1 = absent or wrong, 3 = competent, 5 = professional), then multiply by the weight.

# Criterion Weight 1 — weak 3 — competent 5 — professional
1 Decision and clarity 3 No clear recommendation, or "interesting stock" Clear call and value range Call, range, entry plan and size stated in the first 30 seconds; a reader could act on the header alone
2 Expectations and variant perception 3 No view of what the price implies Reverse DCF or implied multiple shown States the market's belief fairly and precisely, the one thing you believe differently, and the class of evidence behind it
3 Evidence 3 Claims come from management or the press Each thesis point carries a number Each point is a number with a primary source, including evidence the market is unlikely to have (scuttlebutt, a note most readers skip, a channel check)
4 Business and moat 2 Adjectives ("strong brand") Returns on capital and a moat argument Incremental returns, unit economics and how the moat is changing, with the numbers
5 Valuation 3 One target price from one multiple DCF or relevant method plus a cross-check Three probability-weighted scenarios tied to drivers; sensitivity to the one or two drivers that matter; the method suits the business (P/B–RoE for lenders, per-tonne for commodities)
6 Risks, pre-mortem and thesis-breakers 3 "Risks: competition, regulation" Specific risks with mechanisms A pre-mortem that names what the thesis ignored; three to five dated, observable thesis-breakers you would act on
7 Accounting and governance 2 Not mentioned Checklist run; flags noted Reported numbers adjusted where needed, with the adjustment carried into the valuation; governance rating justified
8 Sizing and portfolio fit 1 None A size A size derived from the max-loss rule and fractional Kelly, with overlays, liquidity and correlation checked
9 Q&A 3 Defensive, vague or invents numbers Answers most questions with evidence Concedes good points, quantifies answers, says "I don't know — here is how I would find out", and updates the view live when a question warrants it
10 Communication 1 Over time; jargon; reads the slides Within time; logical Within time; the first sentence is the conclusion; every slide or paragraph earns its place

The weights sum to 24; the maximum raw score is 120. Scale to 100 by multiplying the raw score by 100 ÷ 120.

Automatic caps:

  • Any invented number caps the total at 50.
  • No bear case, or a bear case above the current price for a Buy, caps it at 60.
  • No thesis-breakers caps criterion 6 at 2.

Question bank

Your partner draws at random. Answer in under a minute each, with a number wherever possible.

Expectations and valuation

  1. What growth and margin does today's price imply, and why is the market wrong?
  2. What is the single assumption your value is most sensitive to? Show the swing.
  3. Your terminal value is what share of EV, and what return on new capital does it imply?
  4. Why is your multiple cross-check different from your DCF, and which do you trust?
  5. At what price would you change your recommendation, in each direction?

Business

  1. Who is the marginal customer, and why do they choose this company over the next best alternative?
  2. What are incremental returns on capital over the last three years, and why do they differ from the average?
  3. What would a well-funded competitor do to attack this business, and what would it cost?
  4. Which KPI would tell you first that the thesis is breaking?
  5. What does the best bear on this stock say, in their words?

Accounting and governance

  1. How does CFO compare with PAT over five years? Explain the gap.
  2. What did you adjust in the reported numbers, and what did the adjustment do to value?
  3. What are the related-party transactions, and have they grown faster than revenue?
  4. Has the auditor, the CFO or an independent director left in the last three years? Why?
  5. What does the rating agency worry about that you don't mention?

Process and psychology

  1. What evidence would make you sell within three months?
  2. What did you believe at the start of your research that you no longer believe?
  3. Which fact in your memo would you be least surprised to see be wrong?
  4. How much would you lose in the bear case, and how does that set your size?
  5. If you could ask management one question, what would it be, and what answer would worry you?

Curveballs

  1. Explain the business to a twelve-year-old in two sentences.
  2. Which case study from Module 13 does this resemble most, and how is it different?
  3. If the stock fell 30% tomorrow with no news, what would you do?
  4. What is the options market implying for the next results, and do you agree?
  5. Why hasn't someone smarter already arbitraged away your edge?

Two example pitches

Both pitches are on Nirmal Finance, the course's fictional NBFC, at ₹402 on 18 September 2026. Read both, score both on the rubric before you open the scored breakdown, then compare your scores with the key's.

Example A — "Nirmal Finance: priced for a 21% RoE, earning 15%"

Header. Nirmal Finance (fictional NBFC), ₹402, market cap ₹4,422 Cr, 18-Sep-2026. Avoid now; buy below ₹250 (1.6× FY26 book). 12-month value range ₹139–₹453, probability-weighted ₹287. Size: 0 today; a 3.5% starter (half of a 6.8% max-loss target) if the entry price is reached with thesis-breaker 2 clean.

What the market believes. At 2.61× book and a 13% cost of equity, the price implies a sustainable RoE of about 21% (g = 8%). Nirmal has never earned more than 15.9% (FY23). The market is paying for a lender that grows 20% and re-rates its returns.

Variant perception. The used-CV credit cycle is turning, and the numbers show it before the narrative does.

Thesis.

  1. Stage-3 loans are up 71% in two years (₹117.5 Cr → ₹200.7 Cr) while AUM grew 47%. GNPA has risen from 2.5% to 2.9%, and provision coverage has fallen from 57% to 55% (note 4, FY26 annual report).
  2. Credit cost has risen from 1.3% to 1.9%. A return to 3.0% (FY21 was 3.6%) would cut FY26 PAT from ₹239.5 Cr to about ₹187 Cr, an RoE of 11.8%.
  3. The RoE is not going to 21% through leverage either. That would take 6× assets to equity and CRAR near 20%, which the AA− rating would not survive unchanged.

Valuation (P/B = (RoE − 8%) ÷ 5%, on FY27E book of ₹174):

Scenario Sustainable RoE P/B Value Probability
Bull: the market is right 21% 2.6× ₹453 25%
Base: through-cycle 16% 1.6× ₹279 50%
Bear: CV downturn 12% 0.8× ₹139 25%

Weighted value ₹287: −29% expected, with +13% up and −65% down.

Thesis-breakers.

  1. Stage-3 falls below 2.5% for two consecutive quarters by Q4 FY27.
  2. Credit cost is at or below 1.5% in H2 FY27.
  3. Used-CV disbursement growth is maintained without yield cuts. Any one of these moves me to Watch-Buy at ₹330.

Pre-mortem. If this call is wrong, it is because CV demand stays strong through the 2027 infrastructure push and Nirmal's tractor and MSME books dilute the CV cycle. The monitoring KPI is the stage-3 split by product in the quarterly investor presentation.

Forensic and governance. Green on accounting. On governance, the PE fund's 17% is a supply overhang: it entered in FY19, and a fund's typical 7–10-year life makes a block sale plausible within two years.

Example B — "Nirmal Finance: India's next compounding lender"

BUY — target ₹600 (50% upside)!

Nirmal Finance is a high-quality NBFC riding India's credit-penetration story. India's credit-to-GDP is far below developed markets, and rural India is formalising fast. AUM has grown at 21% a year and management has guided to "25% AUM growth over the medium term" on the Q1 call.

The stock trades at only 18× earnings while the leading NBFCs trade at 30×. Applying 25× to FY28E EPS of ₹24 (management guidance) gives ₹600. The chart has formed a cup-and-handle, and a breakout above ₹420 will trigger momentum buying.

Asset quality is well controlled at GNPA 2.9%, and the company is well capitalised with a CRAR of 27.6%. The PE investor is a strong vote of confidence. Management is experienced and has navigated COVID successfully.

Risks: competition, regulation, and macroeconomic slowdown. These are all well managed by an experienced team.

I am very confident this is a multi-bagger over three years.

After the pitch

  • Put the memo, model summary and your scores in the casebook, under cases/<TICKER>/. The templates are in Module 15.
  • Record the three questions you answered worst, and add them to your personal question bank for the capstone.
  • Set a date to re-read the memo against the thesis-breakers, a quarter from now. The pitch is only worth its follow-up.

Scored breakdown of the examples

← Mock 5 · Final exam · Module index · Drill · Unidentified industries →