DCF Calculator — Find the Intrinsic Value of Any Indian Stock
DCF (Discounted Cash Flow) calculates the intrinsic value of a business by projecting its free cash flows over 10 years and discounting them back to today using your required rate of return (WACC). Enter a stock's FCF, expected growth rates, and WACC to instantly get the intrinsic value per share — and see whether the current price offers a margin of safety.
Free cash flow from latest annual report
Conservative estimate for the next 5 years
Slower growth as business matures
12–15% is typical for Indian equities
Usually 4–5% for India (long-run GDP growth)
Total debt minus cash. Enter negative if net cash
From annual report or NSE/BSE filing
To compare IV vs current price (optional)
How to Use This DCF Calculator
- Current FCF (₹ crores): Use the latest annual free cash flow — typically Operating Cash Flow minus Capex. Find it in the cash flow statement of the annual report or on screener.in.
- FCF Growth Rate Yr 1–5 (%): Your estimate for how fast FCF will grow over the next 5 years. Be conservative — use the company's historical 3-yr FCF CAGR as a starting point, then discount it.
- FCF Growth Rate Yr 6–10 (%): Growth typically slows as a company matures. This should be lower than your Yr 1–5 rate. Think of it as the company reaching a "cruising altitude."
- WACC (%): Your required annual return. 12% is a reasonable floor for Indian equities; increase to 14–16% for riskier mid-caps or businesses in cyclical sectors.
- Shares Outstanding (crores) & CMP: Use the diluted share count from the latest quarterly filing. Enter the current market price to get an immediate undervalued / overvalued verdict with margin of safety.
Frequently Asked Questions
What is DCF valuation?
DCF (Discounted Cash Flow) values a business by estimating how much free cash flow it will generate over the next 10 years and discounting those future cash flows back to their present value using WACC. The sum — plus a terminal value — gives you the enterprise value of the business. Divide by shares outstanding for intrinsic value per share.
What WACC should I use for Indian stocks?
For large-cap Indian stocks with stable earnings, 12–14% WACC is standard. For mid-caps or businesses with higher risk, use 14–16%. WACC is your opportunity cost — the minimum return you expect for taking equity risk in that company.
What is a good terminal growth rate for India?
Most analysts use 4–5%, anchored to India's long-run nominal GDP growth. Going above 6% inflates the terminal value significantly and can make any stock look cheap. The terminal growth rate must always be lower than WACC.
DCF vs PE — which is better?
Both serve different purposes. PE is a quick relative valuation — how much the market pays per rupee of earnings vs peers. DCF is absolute — what the business is worth independent of the market. Use PE to screen and DCF to confirm. DCF is most reliable for companies with predictable, growing FCF.
How accurate is DCF for mid-cap Indian stocks?
Less reliable than for large-caps with stable FCF. Mid-caps often have lumpy or volatile cash flows, making 10-year projections inherently uncertain. Always use a margin of safety of at least 25–30% when making buy decisions based on DCF. Think of DCF as a range, not a precise price target.
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