1. What is India-specific Intrinsic Value?

The India-specific intrinsic value calculation estimates the true worth of a stock in the Indian market context, adjusting Graham or DCF models for local market conditions. It helps identify undervalued or overvalued stocks in the Indian market.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( IV \) — Intrinsic Value (INR/share)
• \( EPS \) — Earnings Per Share (INR)
• \( PE\ Base \) — Base Price-to-Earnings ratio (unitless)
• \( Growth\ Adjustment \) — Adjustment for expected growth (unitless)

Explanation: The equation accounts for current earnings and expected future growth potential, adjusted for Indian market conditions.

3. Importance of Intrinsic Value Calculation

Details: Calculating intrinsic value helps investors make informed decisions by comparing a stock's market price to its estimated true value, especially important in volatile emerging markets like India.

4. Using the Calculator

Tips: Enter EPS in INR, PE Base (typically 7-8.5 for Indian markets), and Growth Adjustment (based on expected earnings growth). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from Graham's formula?
A: This version is adapted for Indian market conditions with modified PE base and growth adjustment factors.

Q2: What's a typical PE Base for Indian stocks?
A: For Indian markets, PE Base typically ranges from 7 to 8.5, compared to Graham's original 8.5.

Q3: How to determine Growth Adjustment?
A: Growth Adjustment can be estimated as (2 × expected earnings growth rate) for Indian stocks.

Q4: Are there limitations to this formula?
A: Less accurate for high-growth or cyclical stocks, and doesn't account for interest rate changes.

Q5: Should this be the only metric for stock valuation?
A: No, it should be used with other fundamental and qualitative analysis for best results.