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Valuation Methods

Master stock valuation — from DCF and intrinsic value to relative valuation multiples. Know if a stock is overvalued or undervalued before you invest.

Margin of Safety in Stock Valuation — Explained The margin of safety is the difference between a stock's intrinsic value and its current market price. It acts as a cushion, prote… 5 min read
DCF Valuation for Beginners — Step-by-Step Guide Discounted Cash Flow (DCF) is a method to find a stock's true worth by estimating its future cash generation. To value a stock in … 5 min read
How to Calculate Intrinsic Value of a Stock in India Calculating the intrinsic value of a stock means finding its true worth based on its future earnings and assets, not just its curr… 5 min read
10 Inputs You Must Get Right Before Running a DCF To run a successful DCF, you must get 10 key inputs right, including realistic revenue growth, operating margins, and an appropria… 5 min read
How to Apply a Margin of Safety to Your DCF Valuation A margin of safety is the difference between a stock's intrinsic value and its market price. To apply it, calculate your 'buy pric… 5 min read
How to Use DCF for Long-Term Buy-and-Hold Decisions DCF helps long-term investors estimate the fair price of an Indian stock by discounting its future free cash flows to today. Use a… 5 min read
What is PEG Ratio and Why It Beats Simple P/E? The PEG ratio is a valuation metric that adjusts the standard Price-to-Earnings (P/E) ratio by factoring in a company's expected e… 5 min read
Best Valuation Multiples for Indian Banking Stocks The best valuation multiple for Indian banking stocks is the Price-to-Book (P/B) ratio, but only when used with other quality metr… 5 min read
How to Value Indian IT Stocks Using the Right Multiples To value Indian IT stocks, you compare their financial ratios like P/E and P/S to similar companies in the industry. This helps yo… 5 min read
Stock Has a P/E of 100 — Is It Overvalued? A stock with a P/E of one hundred is not automatically overvalued; the number can come from a temporary earnings dip, very high ex… 6 min read
Valuation Multiples Checklist Before Buying Any Stock To value a stock in India, use a checklist of financial ratios known as valuation multiples. These ratios help you compare a compa… 5 min read
Is DDM Useful for Indian Stocks? DDM is not useless for Indian stocks; it is a precision tool for mature, dividend-paying companies. Names like Coal India, ITC, ON… 5 min read
How Gordon Growth Model Connects to the P/E Ratio The Gordon Growth Model connects to the P/E ratio by showing that the P/E ratio is derived from a company's dividend payout ratio,… 5 min read
Dividend Discount Model for REIT Valuation in India REITs are valued based on the income they generate for investors. The Dividend Discount Model (DDM) is a useful tool that calculat… 5 min read
Best Online DDM Calculators for Indian Stocks For Indian stocks, MacroTrends, Finbox, Finology, Screener.in, and ValueMyStock lead the list of online DDM calculators. A custom … 6 min read
Best Sectors in India for DDM-Based Stock Valuation The Dividend Discount Model (DDM) is best used for valuing mature, stable companies that pay regular dividends. In India, the best… 5 min read
How to Value a Conglomerate Using SOTP Method The Sum-of-the-Parts (SOTP) method values a conglomerate by breaking it into individual business segments, valuing each part separ… 6 min read
How to Calculate NAV of an Asset Management Company (AMC) To calculate the value of an Asset Management Company (AMC), you must look beyond its funds' NAV. The primary methods involve valu… 5 min read
How to Value a Media Company With Intangible Assets Book value misleads on media stocks because brands, IP catalogs, subscribers, and content rights sit off the balance sheet. Value … 5 min read
Asset-Based Valuation Mistakes Beginners Make Beginners often make mistakes in asset-based valuation by not adjusting book values to market values or ignoring intangible assets… 5 min read
How Much Weight to Give Asset Valuation vs Earnings Valuation? A good way to value a stock is to use a 60/40 rule: give 60% weight to its earnings valuation and 40% to its asset valuation. This… 5 min read
What is Market-to-Book Ratio Across Different Sectors? The market-to-book ratio compares a company's market value per share to its book value per share. This ratio changes a lot from on… 5 min read
How to Value an IPO Before Investing — Step-by-Step To value an IPO, you must read the company's Draft Red Herring Prospectus (DRHP) to understand its business and financials. Then, … 5 min read
Growth Stock Valuation vs Value Stock Valuation — Key Differences Growth stock valuation focuses on a company's future potential and high growth rates, using metrics like the Price-to-Sales ratio.… 5 min read
Why the Market Is Sometimes Wrong About a Stock's Value The market is sometimes wrong about a stock's value because it is driven by human emotions like fear and greed, not just cold, har… 5 min read
Best Valuation Frameworks for Indian IT Stocks The best valuation frameworks for Indian IT stocks are DCF with rupee-denominated cash flows, EV/EBITDA for peer comparison, and r… 5 min read
How Many Valuation Methods Should You Use Before Buying a Stock? You should use at least 2 to 3 valuation methods before buying any stock. Cross-checking P/E ratio, EV/EBITDA, and DCF together gi… 5 min read