Valuation Analysis – dataonesix.com

11. Valuation & Analysis

Company Valuation, Intrinsic Value & Financial Metrics

1. DCF Valuation

Discounted Cash Flow Model

Illustrative Demo Data

Current Free Cash Flow₹210 Cr

Forecast Growth10%

Discount Rate (WACC)12%

Terminal Growth4%

Year	Forecast FCF	Discounted FCF
Year 1	₹231 Cr	₹206.25 Cr
Year 2	₹254.1 Cr	₹202.47 Cr
Year 3	₹279.51 Cr	₹199.08 Cr
Year 4	₹307.46 Cr	₹195.62 Cr
Year 5	₹338.21 Cr	₹192.12 Cr

Formula 1 — Forecast Free Cash Flow

FCFₙ = Current FCF × (1 + Growth Rate)ⁿ

Formula 2 — Present Value of FCF

PV = FCFₙ ÷ (1 + WACC)ⁿ

Formula 3 — Terminal Value

TV = FCF₅ × (1 + Terminal Growth) ÷ (WACC − Terminal Growth)

Formula 4 — Enterprise Value

EV = Sum of Forecast FCF Present Values + Present Value of Terminal Value

Demo Calculation — Year 1 ₹210 × 1.10 = ₹231 Cr
₹231 ÷ 1.12 = ₹206.25 Cr

DCF forecast values are illustrative. Terminal value and enterprise value require all forecast periods and the discounted terminal value to be calculated consistently.

2. Comparable Company Analysis

Relative valuation using peer multiples

Illustrative Demo Data

Valuation Multiple	Peer Average	Sample Company
P/E Ratio	22x	20x
EV / EBITDA	12x	11x
Price / Sales	3.5x	3.2x

Formula 1 — P/E Ratio

P/E = Market Price per Share ÷ Earnings per Share

Formula 2 — EV / EBITDA

EV / EBITDA = Enterprise Value ÷ EBITDA

Formula 3 — Price / Sales

P/S = Market Capitalization ÷ Revenue

Demo Calculation — P/E ₹400 Market Price ÷ ₹20 EPS = 20x

3. Enterprise Value Analysis

Business value after considering debt and cash

Illustrative Demo Data · ₹ Cr

Market Capitalization₹2,000

Total Debt₹300

Cash & Equivalents₹200

Enterprise Value₹2,100

Formula — Enterprise Value

EV = Market Capitalization + Total Debt − Cash & Cash Equivalents

Demo Calculation ₹2,000 Cr + ₹300 Cr − ₹200 Cr = ₹2,100 Cr

4. Intrinsic Value vs Market Price

Illustrative per-share valuation comparison

Illustrative Demo Data

Estimated Intrinsic Value₹450

Market Price₹400

Difference₹50

Illustrative Upside12.5%

Intrinsic Value₹450

Market Price₹400

Formula 1 — Value Difference

Difference = Intrinsic Value − Market Price

Formula 2 — Upside / Downside

Upside % = ((Intrinsic Value − Market Price) ÷ Market Price) × 100

Demo Calculation (₹450 − ₹400) ÷ ₹400 × 100 = 12.5%

5. Valuation Multiples

Key market valuation ratios

Illustrative Demo Data

P/E Ratio20x

P/B Ratio3.2x

P/S Ratio3.2x

EV / EBITDA7.5x

Formula 1 — Price to Earnings

P/E = Market Capitalization ÷ Net Profit

Formula 2 — Price to Book

P/B = Market Capitalization ÷ Shareholders’ Equity

Formula 3 — Price to Sales

P/S = Market Capitalization ÷ Revenue

Formula 4 — EV / EBITDA

EV / EBITDA = Enterprise Value ÷ EBITDA

Demo Calculation — EV / EBITDA ₹2,100 Cr ÷ ₹280 Cr = 7.5x

6. Growth & Earnings Analysis

Revenue, EPS and Free Cash Flow growth

Illustrative Demo Data

Revenue Growth19.0%

EPS Growth32.1%

FCF Growth31.3%

Formula 1 — Revenue Growth

((Current Revenue − Previous Revenue) ÷ Previous Revenue) × 100

Formula 2 — EPS Growth

((Current EPS − Previous EPS) ÷ Previous EPS) × 100

Formula 3 — FCF Growth

((Current FCF − Previous FCF) ÷ Previous FCF) × 100

Demo Calculation — Revenue (₹1,250 − ₹1,050) ÷ ₹1,050 × 100 = 19.0%

7. DCF Sensitivity Analysis

Illustrative effect of WACC and Terminal Growth on valuation

Illustrative Demo Data · ₹ Cr

WACC / Growth	3%	4%	5%
10%	3,500	3,850	4,300
12%	2,900	3,150	3,450
14%	2,500	2,680	2,900

Formula — Terminal Value

TV = FCFₙ × (1 + g) ÷ (WACC − g)

Formula — Present Value of Terminal Value

PV of TV = TV ÷ (1 + WACC)ⁿ

Formula — DCF Enterprise Value

EV = PV of Forecast FCFs + PV of Terminal Value

Interpretation Higher WACC generally lowers present value. Higher terminal growth generally increases terminal value, assuming growth remains below WACC.

8. Valuation Summary

Key valuation indicators at a glance

Illustrative Demo Data

Intrinsic Value / Share₹450

Market Price / Share₹400

Upside Illustration12.5%

Enterprise Value₹2,100 Cr

P/E Multiple20x

EV / EBITDA7.5x

Summary Formulas Enterprise Value = Market Cap + Debt − Cash
P/E = Market Cap ÷ Net Profit
EV / EBITDA = Enterprise Value ÷ EBITDA
Upside % = ((Intrinsic Value − Market Price) ÷ Market Price) × 100

Valuation is an estimate based on assumptions. Different valuation methods can produce different results. A higher estimated value does not guarantee future market performance.

Disclaimer: All figures are illustrative demo data for educational purposes only. They are not live stock prices, verified company financials or investment recommendations. The DCF and sensitivity figures are examples, not a complete linked valuation model.