Before I Value Any Business… I Do This First
Hello readers,
Welcome to another weekly edition of The Valuation Story
Let me tell you a story about something most people don’t see coming.
In this newsletter, I’ll talk about:
What I always do before I start valuing any company.
How I applied this while studying Polycab India and Ather Energy.
Whenever people hear “valuation”, they imagine a big Excel sheet with hundreds of formulas. But honestly, I don’t start there.
Before touching Excel, I try to understand the story of the business.
Because if you don’t know what’s actually happening inside the company,
those numbers mean nothing.
It is like trying to judge a movie just by its box office collection,
You will never know why people loved it.
Step 1: Understand what the business really does
When I started with Polycab India, I didn’t look at the margins first.
I just wanted to know what exactly they are selling?
Turns out, it’s mostly wires and cables.
Boring, right? That’s what I thought too.
But then I looked deeper.
Every house, every factory, every metro, every EV charger,
They all need wires.
So it’s not just a “boring wire company.”
It’s a quiet participant in India’s growth story.
That’s when I understood Polycab’s real strength,
they grow with the country.
When India builds, it sells more.
Then I looked at their market;
It used to be fully price-based. Whoever sold cheaper won.
But Polycab changed that.
They built trust with electricians, invested in brand visibility,
and turned a low-margin business into a respected brand.
Now, when I saw their margin expanding, it clicked.
Of course, margins are up — they earned that premium through brand and trust.
That’s why I always say,
before you see numbers, understand the people and product behind them.
Step 2: Know the stage of the business
Then came Ather Energy.
And here, I had to change my thinking completely.
Ather isn’t a mature company like Polycab.
It’s still building. Still figuring things out.
So instead of asking “how much profit?”,
I asked, “What stage are they in?”
They’re still in the scale-up phase.
Investing heavily in R&D, building charging stations, improving batteries, and fighting for market share.
They’re not chasing profit right now; they’re chasing survival and leadership.
When I realised this, I stopped comparing them with mature companies.
Because it’s unfair to expect consistent margins from a startup still writing its playbook.
And more importantly, Ather isn’t just an EV scooter company.
They’re building a whole energy ecosystem.
charging network, battery tech, smart features, everything that connects the EV world.
Once I saw that bigger picture,
I stopped seeing Ather as “loss-making”.
I started seeing it as “investing to create an advantage”.
Step 3: Connect the story with numbers
Now, when I finally sit down to value them,
I don’t guess numbers.
I already know the direction.
For Polycab, the story is simple:
India is building → demand for cables rises → brand gives pricing power → profits stay strong.
For Ather, the story is:
EV adoption rising → early-stage burn → long-term network advantage → delayed but strong profitability.
That’s it.
When your story is clear, valuation becomes logical.
No random assumptions, no guesswork — just connecting dots.
My simple takeaway:
Valuation is not about being a “finance expert.”
It’s about understanding why money moves the way it does in a business.
So before I open Excel,
I spend time understanding the product, the customer, the market, and the journey.
Because once you get the story right,
the numbers tell themselves.
Next time, I will share how I forecast revenue for both —
How I linked real-world growth drivers to realistic projections.
Not textbook stuff, real thinking.
Till then, remember this,
Before you value the company, learn to understand it like a founder.
Spend consciously. Value wisely. Live intentionally.
Akash - (The Valuation Story)
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