DCF Calculator – Intrinsic Value of a Stock

Estimate a stock's intrinsic value per share with a two-stage discounted cash flow model, and compare it with the market price.

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Intrinsic value per share—
Value of forecast cash flows
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Value of terminal cash flows
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Enterprise value
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Equity value
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Sensitivity: value per share

Year-by-year cash flows

DCF intrinsic value calculator

What is a company actually worth? A discounted cash flow (DCF) model answers that from the cash the business is expected to produce. This calculator uses a standard two-stage model: a period of higher growth, then a steady terminal growth rate forever, all discounted at your required return. It gives theintrinsic value per share, your margin of safety against the market price, and a sensitivity table that shows how much the answer depends on the discount and growth rates — the honest way to read any DCF.

How to use it

  1. Enter last year's free cash flow (₹ crore) from the cash-flow statement.
  2. Choose a growth rate and period, a terminal growth rate and your discount rate.
  3. Enter net debt and the number of shares (in crore), then compare the value with the price.

Example

A company generated ₹1,200 crore of free cash flow, has ₹800 crore of net cash and 60 crore shares. Assume 14% growth for 10 years, then 5% forever, discounted at 12%. The model values the equity at roughly₹35,500 crore — about ₹592 a share — against a market price of ₹520, a margin of safety of about 12%. Note that 62% of that value comes from the terminal years; the sensitivity table shows how quickly the picture changes with more cautious inputs, and cross-check with the P/E ratio calculator.

Disclaimer: Results are estimates for educational purposes only and are not financial, investment or tax advice. Please verify with your bank, broker or a SEBI-registered adviser before acting. Read the full disclaimer.

Frequently asked questions

What is a DCF valuation?
Discounted cash flow values a business as the sum of all the cash it will generate in future, discounted back to today. Cash expected in 10 years is worth less than cash today, so each year’s cash flow is divided by (1 + discount rate) raised to the number of years.
What discount rate should I use?
Use the return you require from the stock — often 11–14% for Indian equities, higher for small or risky companies. Professionals use the weighted average cost of capital (WACC). A higher discount rate gives a lower value.
What is terminal value and why is it so large?
Terminal value captures all cash flows after the forecast period, assuming steady growth forever: FCF × (1 + g) ÷ (r − g). It is often 60–80% of the total value, so small changes in the terminal growth rate move the answer a lot. Keep terminal growth modest — around long-run GDP growth or lower.
Where do I find free cash flow?
Free cash flow = cash flow from operations − capital expenditure, both from the cash-flow statement in the annual report. Average a few years for cyclical businesses. For banks and financial companies, DCF on free cash flow doesn’t work well.
What is margin of safety?
The gap between the estimated intrinsic value and the market price. Because every input is an estimate, value investors often want a 20–30% margin of safety before buying.

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