NISM 15 Case Study 2: Penguin Aircon Industries (Financial Forecasting)

NISM XV Case Study: Penguin Aircon Industries

⚠️ Dhaval's Exam Disclaimer & Tips:

Listen carefully: NISM repeatedly asks this exact question. Usually, the names (Penguin Aircon) and the formulas stay exactly the same. Sometime they change the values, sometimes even the values are not changed!

My Guarantee: Just by-heart these 5 case studies I am posting. If you understand the logic and formulas, you will pass. NISM is asking these only!

Scenario Data (2024):

  • Sales: Rs 330 crores
  • Operating Expenses (excl. depreciation): Rs 140 crores
  • Depreciation: Rs. 48 crores
  • Operating profit (EBIT): Rs 142 crores
  • Interest expenses: Rs 25 crores
  • Profit Before Tax (PBT): Rs 117 crores

Q 1. Calculate the EBITDA margin ratio for the year 2024?

Options:
A. 43.69%
B. 63.77%
C. 57.58%
D. 49.25%

View Correct Answer & Explanation
Correct Answer: C. 57.58%

Explanation:
Given: Sales = Rs. 330 crores
Operating expenses (excl. depreciation) = Rs. 140 crores
Depreciation = Rs. 48 crores
EBIT = Rs. 142 crores

Step 1: Calculate EBITDA
EBITDA = EBIT + Depreciation
EBITDA = 142 + 48 = 190

Step 2: Calculate EBITDA Margin
EBITDA Margin = (EBITDA / Sales) * 100
EBITDA Margin = (190 / 330) * 100 = 57.58%

Q 2 - If the analyst predicts 2025 sales of Rs 380 crores and a 100 bps improvement in the EBIT margin rate, what is the anticipated EBIT for 2025?

Options:
A. Rs. 158.8 crores
B. Rs 162.6 crores
C. Rs 165.7 crores
D. Rs. 167.3 crores

View Correct Answer & Explanation
Correct Answer: D. Rs. 167.3 crores

Explanation:
Given: EBIT = Rs 142 cr
Sales 2024 = Rs 330 cr
Expected sales 2025 = Rs 380 cr

Step 1: Calculate 2024 EBIT margin
EBIT Margin 2024 = EBIT / Sales
= 142 / 330 = 0.4303 = 43.03%

Step 2: Adjust for improvement of 100 bps
100 bps = 1%
Forecasted EBIT Margin 2025 = 43.03% + 1% = 44.03%

Step 3: Calculate expected EBIT for 2025
EBIT 2025 = Sales 2025 * EBIT Margin 2025
= 380 * 0.4403 = Rs. 167.3 crores

Q 3 - The analyst has updated the 2025 EBIT forecast to Rs 148 crores. If the company's total debt is Rs. 300 crores with an 8% weighted average interest, what is the nearest figure to the expected profit before tax for 2025?

Options:
A. Rs. 118 crores
B. Rs. 124 crores
C. Rs. 127 crores
D. Rs. 131 crores

View Correct Answer & Explanation
Correct Answer: B. Rs. 124 crores

Explanation:
Step 1: Calculate Interest expense
Interest Expense = Total Debt * Interest Rate
= 300 * 0.08 = 24 crores

Step 2: Calculate Profit Before Tax (PBT)
EBIT (2025 forecast) = Rs 148 crores
Interest = Rs 24 crores
PBT = EBIT - Interest
PBT = 148 - 24 = Rs. 124 crores

Q 4 - Assuming an 12% sales growth, what will the sales be in 2025?

Options:
A. Rs. 369.6 crores
B. Rs. 376.42 crores
C. Rs. 341.6 crores
D. Rs. 355.66 crores

View Correct Answer & Explanation
Correct Answer: A. Rs. 369.6 crores

Explanation:
Given: Sales in 2024 = Rs. 330 crores
Expected growth rate = 12% = 0.12

Step 1: Calculate Expected Sales
Formula: Sales 2024 * (1 + Growth Rate)
= 330 * (1 + 0.12)
= 330 * 1.12 = Rs. 369.6 crores

Dhaval Visariya

AMFI Registered Distributor (ARN-327925) | Software Developer & Finance Enthusiast

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Disclaimer: I am an AMFI Registered Mutual Fund Distributor. Views expressed here are for educational purposes. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
📧 Contact: info.apollofinancialservices@gmail.com

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