60 pages carry this tag.
TCS, Infosys and HCLTech sell similar services to similar clients. Put their numbers side by side, though, and their margins, returns on capital and cash conversion tell three different stories.
Paytm does not fit neatly next to a bank, a payments processor or a consumer internet company. When no single peer works, valuation has to be done in parts, and in reverse.
Asian Paints is one of India's most admired companies. That reputation is earned, but it can stop investors from asking what the price actually requires. This piece reads the numbers on their own.
Monthly SIPs have become the steadiest buyer in Indian equities. That support works like a flywheel, and flywheels can spin both ways.
A small-cap stock's market value is based on the last small trade. When large funds try to sell at the same time, that price may not exist. This is an opinion piece on why part of the small-cap premium is not real.
The usual valuation toolkit of enterprise value, EBITDA and free cash flow stops working for a bank. Here is why, and what analysts use instead.
India's IT services giants and software product companies share an industry label, but their economics are almost opposite. Services revenue grows with headcount. Product revenue grows with copies of the same code.
A DCF is not a formula you feed numbers into. It is a story about a business, written in cash flows. This walk-through builds one step by step.
Ten-minute delivery is impressive. Whether it is profitable depends on a few numbers per order and per store. Here is how to read them.
IPOs do not add new money to the market, they move it. The arithmetic behind why a heavy IPO year quietly pulls value out of everything already listed.
India's market often trades at a higher P/E than other emerging markets. That can be justified, but only by a specific mix of interest rates, growth and returns on equity. Here is how to check.
Revenue growth is the number that makes headlines. Free cash flow is the number that pays investors. The link between them is the return a company earns on what it reinvests.
A common approach is to value a company and then add or subtract a little for its ESG score. A better approach puts each material ESG issue into the model where it actually changes value.
Analysts spend hours forecasting five years of cash flows, yet most of a DCF's answer usually comes from one number at the end. Here is why, and what to do about it.
WACC looks like a precise input, but it is built from four estimates, each with a range. A one-point change can move a value by 10% to 25%, depending on when the company's cash arrives.
Listing-day gains tell you how scarce the shares were, not what the company is worth. The offer document tells you far more, if you know where to look.
Cement is one of the cheapest things you can buy by weight, which makes it expensive to move. In India, freight and location often decide which cement company makes money.
An index can rise 15% in a year while company profits barely move. Splitting a market return into earnings growth and a change in valuation shows what actually happened.
Every company claims a competitive advantage. A real one shows up in the numbers as returns above the cost of capital that last for years. Here is how to tell the difference.
Market cap tells you what the shares cost. Enterprise value tells you what the whole business costs. Comparing companies on the wrong one can make an expensive company look cheap.
A high P/E is not a verdict of "expensive." It is a sentence the market is speaking about the future, and learning to read that sentence is where valuation actually begins.
How companies decide which long-term investments to make: NPV, IRR and payback, incremental cash flows, MIRR, real options and capital rationing.
How a DCF values a business: FCFF and FCFE, building the model step by step, multi-stage models, sensitivity tables and ESOP dilution.
Valuing a company against its peers with P/E, EV/EBITDA, P/B and EV/sales: when to use each, and why similar companies trade at different multiples.
How to value a conglomerate segment by segment, then allow for debt, central costs and the holding company discount without double-counting.
Why banks, insurers, real estate, oil and gas and telecom need their own valuation metrics, and why EV/EBITDA should never be used for banks.
The two ways to estimate terminal value, Gordon growth and exit multiple, how to cross-check them, and why it dominates a DCF.
Ten common DCF mistakes, from a terminal growth rate above WACC to stale betas and false precision, and how to avoid each one.
Start from today's price and solve for the growth it needs. How to run a reverse DCF, an illustrative worked example, and how to judge whether the implied growth is realistic.
How to read a DRHP or RHP in the order that matters: the offer, the use of the money, the basis for the price, restated financials, risks and lock-ins, with SEBI's allocation rules.
ESG-integrated valuation is not a separate method. It means building material ESG factors into the cash flows, discount rate and terminal value of a normal DCF or multiples analysis.
The original fundamental analysis course: approaches, qualitative factors, the three statements, ratio categories, sector checks, red flags, and valuation models.
Market capitalisation is the total market value of all of a company's shares. It is the money you would need to buy 100 percent of the company at today's share price.
Enterprise value is the true cost of acquiring the whole business. It adds the debt you would inherit to the market cap and subtracts the cash you would gain.
Earnings per share is the slice of net profit that belongs to each share. It is the building block for the PE and PEG ratios.
The PE ratio tells you how many years of current earnings you are paying for a share. It is the most used, and most misused, valuation ratio.
The price to book ratio compares the share price with the book value per share, the accounting net worth that backs each share.
The PEG ratio adjusts the PE ratio for profit growth. It asks whether the multiple you are paying is justified by how fast earnings are growing.
The price to cash flow ratio compares the share price with operating cash flow per share. It uses money actually received instead of booked profit.
The price to sales ratio compares a company's market cap with its annual revenue. It is the multiple you fall back on when there are no earnings to divide by.
EV to EBITDA compares the total cost of acquiring a business, debt included, with its operating earnings before interest, tax, depreciation, and amortisation.
EV to sales compares the total cost of acquiring a business with its annual revenue. It is the price to sales ratio corrected for debt and cash.
Earnings yield is the PE ratio turned upside down: the profit a company earns per year as a percentage of its share price. It lets you compare a stock directly with a bond or a fixed deposit.
Free cash flow yield is the surplus cash a business generates in a year as a percentage of its market cap. It is the earnings yield computed on cash that actually exists.
Dividend yield is the cash dividend paid per share as a percentage of the current share price. It is the only dividend figure worth looking at; the dividend percentage quoted on face value is meaningless.
Start from scratch and build a complete discounted cash flow model for a real Indian company, one concept at a time.
Two-stage DCF model with live sliders, a 5x5 sensitivity grid across WACC and terminal growth, and Excel export.
The ratio of a company's current stock price to its earnings per share. Indicates how much investors are willing to pay for each rupee of earnings.
Compares a stock's market value to its book value. Shows how much investors are paying for the net assets of a company.
The P/E ratio divided by expected earnings growth rate. Adjusts valuation for growth expectations.
The annual dividend payment divided by the stock's current price, expressed as a percentage. Shows income return on investment.
The value of a company's whole business, belonging to both shareholders and lenders: market capitalisation plus debt, minus cash. It is roughly what it would cost to buy the business outright and settle its debts.
Enterprise Value divided by EBITDA. A valuation metric that compares total company value to operating earnings.
A multiple comparing firm value to revenue. Used when earnings are negative or temporarily depressed, since revenue is harder to manipulate than profit.
Free cash flow per share divided by the share price, or firm-level free cash flow divided by market cap. It shows the cash return the business generates on its current price.
The inverse of the P/E ratio: earnings per share divided by price. It expresses valuation as a percentage return, making stocks directly comparable with bond yields.
The share of net profit paid out as dividends. The remainder, the retention ratio, is reinvested in the business.
The value of all cash flows beyond the explicit forecast period in a DCF, usually estimated with the Gordon growth formula. It typically accounts for the majority of a DCF's total value.
The gap between a stock's estimated intrinsic value and its market price. Buying below intrinsic value creates a cushion against errors in the estimate.
Shareholders' equity divided by the number of shares outstanding. It is the accounting net worth attributable to each share.
Related topics: DCF, Relative valuation, Cost of capital, Financial statements, Cash flow, Earnings quality, Red flags, Ratios
