How to Find Intrinsic Value of a Stock | Excel Calculator | Calculate Intrinsic Value of Infosys

[@deepakjohsh7748]

Information which 90% of so called stock advisors on youtube can never talk about. Brilliant content!! your Intrinsic value of subscribers is definitely in Millions, The day will come!

[@shankarnath]

Thank you very much for the vote of confidence, Deepak ji. I'm glad you like my work

[@shritejkz]

I dont think anybody can ever explain such a complicated concept in literally 17-18 mins. Kudos Shankar sir!

[@shankarnath]

Thank you very much 🙌 I'm glad you found it useful & were able to relate to all the steps.

[@dhavalpandya2971]

​@@shankarnathawesome information sir you are doing very hardwork for us thanks 🙏🙏😊

[@maulik2500]

This guy is like an underdog KZbinr . He makes best videos on investing but very few people know about him. Let’s make him famous. Let’s share , comment and like his videos so that he gets his due.

[@shankarnath]

Glad you like my work 🙌

[@itskb5956]

Let's not

[@veletiraghunathsharma7038]

Speed to be controlled

[@IndusBee]

😂 Shady subscribers ...

[@maulik2500]

@@IndusBee is copy paste kinda creator. Such a loser .

[@anandvipr]

This is one of the best videos of Stock valuation that i have come across. It takes Warren buffett's methodology (DCF) and puts it in a way where a layman investor like me can understand.

[@shankarnath]

Thank you very much 🙌

[@rajeevkumria]

You are brilliant Shankar. In fact this is a great learning for people who are in valuation and m&a stream.

[@shankarnath]

Thank you very much, Rajeev. Much appreciated! 🙌

[@Abhaykk1994]

Amazing Shankar. Not even my finance prof had explained this to me so clearly. Great job and this is possibly the best video on intrinsic value calculation.

[@shankarnath]

Thank you, glad you liked it and found it useful

[@shritejkz]

100% agree. As a PGDM (Securities Markets specialization) student , i can definitely say this was better than any proff

[@DineshNarayana]

Excellent explanation for a Financial Dud like me..!! I have repeatedly heard it. Thank you Sir..!!

[@shankarnath]

You're most welcome. Glad you like it

[@DineshNarayana]

Just to not patronize, yet state the truth, I have been watching your videos (and taking notes) ever since you were on ETMoney..!! And a lot of my learnings are attributed to these videos. Many thanks. :D

[@zenobiasanchawalla4339]

Great research and content is in a very easy to understand language

[@shankarnath]

Thank you very much

[@ashwinisudan6462]

Awesome.Will need to see it a few times more before i get a grasp.I intend practicing it,let's hope I finally do manage to work it out.Thanks.Grateful.Very educative.

[@shankarnath]

Most welcome. Glad you found it informative!

[@VisheshDudheria]

u every video deserves atleast 5 crore views... unfortunately not many people in our country has interest in finance..u r doing impeccable work ... unmatchable finance content...just watching a couple of yr videos has made me yr fan

[@shankarnath]

Thank you so much Vishesh ji. I'm happy you like my work 🙌

[@naveenkumarkaranam2799]

Thanks once again for this crisp stuff. Will try out on the stocks in my portfolio and see if I have made the buyings at right price.

[@shankarnath]

Most welcome. Yes, please do .. it would give more clarity & reaffirm your investment thesis

[@gkswamy2889]

Fantastic video. Most difficult subject exceptionally made simple. Too good to be true. Thanks ❤

[@shankarnath]

My pleasure 😊 .. please do put it to use. It's a bit tough initially but once one gets used to the process, it offers a big layer of comfort before investing

[@lakskanth]

As always, your content is awesome & simple to understand. Thankyou

[@shankarnath]

My pleasure! Glad you found it useful and easy to comprehend

[@DIVIDEND-RETIREMENT]

Appreciate for your hard work. Very informative and knowledgeable video. Learn lots of things. Thank you❤

[@shankarnath]

Most welcome. I'm glad you liked it

[@meetmanas]

I recently did my MBA from a top rung B school and Shankar Nath nailed it (by miles) and explained the concept of intrinsic value beautifully 🖖

[@shankarnath]

Glad to hear that!

[@meetmanas]

@@shankarnath meant every word as you earned it:)

[@edwininnocent6408]

This method of finding the intrinsic value of a stock sounds like the method used by Warren Buffett. If we analyze stocks like him and act like him we can earn huge profits. Great analysis. Thank you very much.

[@shankarnath]

Glad you like the video & found it informative!

[@sandipghiya3493]

I always appreciate videos primarily because it’s data driven. Good job ✅

[@shankarnath]

Thank you 🙌

[@mayurmore7936]

Supremely quality content, i never thought a stock can be valued in such a way, kudos shankar

[@shankarnath]

Thanks, glad you found it informative

[@akhaleefa]

Your are one of the best in making such amazing videos. Thanks.

[@shankarnath]

Wow, thank you! 🙌

[@bharanikumar9511]

Very clear explanation.very few are there in KZbin with such basic knowledge of share market.

[@shankarnath]

Glad to hear that

[@MrSachin1087]

As always, excellent video Shankar. Clear, concise and very helpful. Thank you for sharing your knowledge.

[@shankarnath]

My pleasure. Thank you very much 🙌

[@hemanthkaja]

nice video Shankar ji. I always have a little confusion in my head with respect to DCF but you explained it in a simplified manner. Thanks😀

[@shankarnath]

My pleasure. Glad you found it helpful!

[@human_oid9994]

The Best video on valuation ❤

[@shankarnath]

Wow, thank you! 🙌

[@mozo199]

06:57 should we not consider net cfo which includes tax?

[@shankarnath]

There is no firm rule around it. You can use gross or net per your comfort.

[@mozo199]

@@shankarnath Thank you, i'm loving your videos and would love to learn lot more from you.

[@mozo199]

for the terminal value I would also recommend Gordon's terminal valuation model.

[@sguchait]

So important for any investor to understand this. Thanks Shanker

[@shankarnath]

My pleasure!

[@Sundarperunarkilli]

As usual woww ! Great video Shankar , at some places sounded like listening to Einstein relativity theory .But it's so good .will try to do the same calculation for Wipro !

[@shankarnath]

Thanks a ton. Please share your results (intrinsic value) on Wipro for the benefit of the larger group.

[@chuttiarivu]

Thanks a lot, easy to understand by the common man, great work.

[@shankarnath]

Glad it helped! You're most welcome

[@prasadrayannavar9117]

Thank you for valuable information sir 🙏🙏🙏

[@shankarnath]

Most welcome 🙌

[@lalalali9767]

Others are influencers but you are a real teacher sir thankyou very very much sir. But sir can you please make a detailed video on economic moats and how to find companies with very big economic moats

[@shankarnath]

Thank you for your suggestion. What all would you like to understand with regards to moats?

[@anondodasgupta5275]

This is the simplest and most effective explanation of DCF. In the oast I followed the EV/EBITDA, P/E and P/B models, especially the first one. Never tried the DCF as I felt it too complicated. I agree with you on the DDM. Not a bog fan of it though. Of late, I am not doing much valuation as I am predominantly a momentim investor. But, looking to do valuations again for a few stocks. This video will definitely help me.

[@shankarnath]

Glad it helped!

[@ajaysundaramurthy338]

It is very nicely presented and the content is very well defined. Thank you for this information.

[@shankarnath]

You are most welcome 🙌

[@singaramsingaram2075]

I was thinking about today’s video and got a pop-up. Thanks, as always, Shankar 😊

[@shankarnath]

My pleasure!

[@mevikki4u]

@Shakar - I have been trying to learn how to calculate Intrinsic value. Followed the dean of valuation - Prof. Damodaran also. It's a fancy concept and unlike many other financial ratios and numbers, it's quite complicated and has lots of subjectivity to it. In your video you have explained it with a great ease. Thank you so much. I have a question though on Infosys' intrinsic value. Infosys traded at 854 in Covid times (Jun'20). It will need to shed 40% to get back to that. Also, it's imp to note - Infosys is trading at historically lower than five-year median PE. So this gets confusing. As per Intrinsic value - Infosys is not a good buy. However, as per latest IT sector down trend and low PE - Infosys is a good buy. What am I missing?

[@shankarnath]

Thank you very much. This intrinsic value calculations are based on my assumptions. Owners earning growth rate, terminal value multiplier, discount rate and the margin of safety were all crucial assumptions. Understandably, on an excel sheet, it is easy to show that even 2000 rupees is a steal for Infosys. Now it's upto you and what you believe it. The point on Infosys trading at historically lower than the 5-year median PE is an interesting point you raise. Many investors will say "Oh wow! It's low" but over time, I've forced myself to ask "Why is it low? Is it because the growth rate has stalled? Are there headwinds? What is the management saying? etc."

[@jav1wx]

Great content as usual. Will try the spreadsheet and give comments.

[@shankarnath]

Awesome, thank you!

[@MurtuzaZabuawala-e3h]

Great content & learning!

[@shankarnath]

Glad to hear that! Thx!

[@jesin1993]

Nobody in youtube explains it simpler than you do Shankar

[@shankarnath]

Thanks for the suggestion

[@revanthgowd5744]

Thank you very well explained & presented ❤

[@shankarnath]

You’re welcome 😊

[@musicflix2459]

Hi sir whatever knowledge u r sharing is valuable for beginners and very helpful can we calculate the intrinsic value for the past 5 years

[@shankarnath]

Thank you!

[@sunithanair8216]

A truly enlightening experience Sir thank you

[@shankarnath]

My pleasure 🙌

[@RitikGangwar]

Hi sir! I just came across ur videos they r amazing... Keep up the good work 🙌🙌

[@shankarnath]

Thanks and welcome

[@hirendesai5724]

Awesome stuff to introduce someone to valuations. Please make video on reverse DCF

[@shankarnath]

Thanks for the appreciation and suggestion

[@sokat36]

What an excellent vedio on Instrinsic value, Superb!

[@shankarnath]

Glad it was helpful!

[@drthiruna]

Great effort. Really worth watching

[@shankarnath]

Thanks a ton, glad you liked it

[@shubhampatil3798]

Sir can you make a video on reverse dcf on tijori finance

[@shankarnath]

Thanks for the suggestion

[@SuperDry_]

Thank you for this video. Request you to please answer my question, 2 companies of the same sector, similar PE, ROCE, PEG, Promoter holding etc. BUT the 1st company has FV of 10 and the 2nd has FV of 1. Which one would you choose?

[@shankarnath]

I will be indifferent to it. Out of curiousity - why did you ask this question?

[@SuperDry_]

@@shankarnath I thought you would be the right person to ask considering your acumen. Had this query in my mind for some time. Thank you once again for the reply and always look forward to your videos 👍

[@SSB2706]

Fully loaded with information, thank you

[@shankarnath]

Glad it was helpful!

[@eskay1959]

Very nice presentation. Easy to understand

[@shankarnath]

Thank you very much!

[@gauravgokzz]

Good work. Explained in best way. But please tell me how to get mcap data from 5yr .

[@shankarnath]

Thanks. A rough and dirty way of doing it is to take the current mcap and dividing it by the 5 year price returns. For example - if a company X is at 10000 crore mcap today and over the last 5 years, it has given a share price return of 20% per year. Then --- 10000 divided by (1+20%) raised to the power 5. This will come to 4,018 crores

[@PremRaj-p4y]

Excellent. Thanks for your efforts

[@shankarnath]

My pleasure

[@rajneeshplp]

Hi shankar. Assuming all assumttions of CF growth, terminal value multiplier turn out to be correct and assune you baught at the price available by DCF method ( without margin of safety) and you hold for 10 years. What return will you earn - CF growth %age? Or Discount rate-12% or something entirely different. ( I'm trying to understand what's the benefit of doing all this future guessing exercise)

[@hareeshmuthu5412]

Nice easy way of Explanation. But i have a difference of opinion in Discounted Cash Flow Analysis in your excel, if possible we can discus.

[@shankarnath]

Thanks. Sure, we can connect over email. I'm at [e-mail]

[@amittiwari7400]

Bhai u are a champ , was looking for this...

[@Vinod-ws1sm]

Very good job sir, God bless u 🎉

[@shankarnath]

Thanks a lot 🙌

[@mohammedshahid8937]

Buffettology in less than 20 min...Great!!!

[@shankarnath]

Thanks

[@baibhavRishu]

As always amazing sir 😁

[@shankarnath]

Thank you so much 😀

[@VIJAYKUMAR-vg7xr]

Thank u Shankar nath sir ❤

[@shankarnath]

Most welcome 🙌

[@vinothraj7617]

Your video is thoughtful and learned something new . But i dont see market capitalization data for pharma sector on their annual report. How to find it?

[@shankarnath]

Thanks. Market capitalisation is as on date, it changes every day & minute. Can you pls clarify what specific information you are seeking?

[@vinothraj7617]

@@shankarnath I am using your excel sheet for DCF model which you explains infosys so i tried to do same for natco pharma. But i don't see market capitalization details in annual report which is given in infosys report.

[@shankarnath]

@@vinothraj7617 Maybe you can connect with the Investor Relations team at Natco Pharma (details are available in company website) for the same. This takes time so personally, I pull out the no. of shares data as on 31st of March of different years (available in annual report) and multiply it with share price on that day (available on screener.in)

[@shiv1pl]

Hi from Muscat Oman.. I am totally impressed with your clarity in presentation. Would like to Seek your service in managing portfolio. How to Reach you?

[@shankarnath]

Thank you very much for your kind appreciation 🙌 . Apologies, I'm not into fund management nor into advisory for now. I'm keen on focussing on education; that's where I am at peace and I think its something I can do well at. If I were to pick up 1-on-1 consultations in the future, then I'll certainly keep my community informed through a community post.

[@akshaypatyal3228]

Your presentation skills are top knotch❤❤❤❤❤❤❤😍👌

[@shankarnath]

Thanks 🙌

[@narendragautam1457]

Excellant Shankarnath ji keep it up

[@shankarnath]

Thanks a lot

[@CredenceInvestmentCoaching]

Sir, I seek clarification regarding the Cash Flow Discounted method. Some experts deduct after-tax operating cash and then subtract capital expenditure. In your calculation, you consider pre-tax cash for evaluation. Which method do you find more appropriate? Thank you.

[@shankarnath]

I have seen people using either of the approaches. I find the pre-tax part better although over long periods, it shouldnt matter asmuch

[@CredenceInvestmentCoaching]

@@shankarnath Thank you so much Sir.

[@se56789]

we can't include reinvested earnings for the NPV.. owners earnings is not used for this

[@narendranath3529]

I felt like learning from warren Buffett himself, such an ease in explaining difficult topics 🙏🙏

[@shankarnath]

Glad to hear that. Thank you for the vote of confidence

[@Pokchok44]

Any idea what approach screener uses to show the intrisniy value?

[@shankarnath]

Hi. Have you seen a screener which shows intrinsic value? If yes, pls share. I haven't seen one yet

[@advmpschauhan3834]

You earned my subscription bro..

[@shankarnath]

Welcome aboard!

[@vvmanimadhuri]

Very useful video on value analysis

[@shankarnath]

Glad it was helpful!

[@nakulvavale3009]

Thank you so much for the amazing video buddy! Hope you would keep bringing such more content. Kudos to you!!🎉

[@shankarnath]

Most welcome 🙌

[@nabeelyahiya]

Thank you for informative video

[@shankarnath]

My pleasure. Glad you found it useful

[@avgang99]

Great video Sir !!! Also could you emphasize more on your checklist in another video ???

[@shankarnath]

Thanks for the suggestion

[@Husain_bohra]

This is Quality.

[@mdrafeek786]

So complex math 😅. Never realised this calculation behind scene 😂. Thank you Shankar

[@shankarnath]

Most welcome 😊 .. the process is nothing but how we think - in reverse. Look at it this way, we buy a house at say, 50 lakhs .. and the assumption is that in 5 years, this will be worth a crore. DCF just reverses this thought i.e. OK, this company will deliver 1 crore after 5 years, what is it worth today? That's it, it's that simple!

[@mdrafeek786]

@@shankarnath feel great today after your reply

[@wisdomhatchwithsuresh]

Wonderful is the Word I would say for this Presentation by Shankar Anna ❤

[@shankarnath]

Thank you very much 🙌

[@Sandeesh_Srikantam]

Which Method should to used for banking stocks in India ?please reply

[@shankarnath]

Please watch my video on how to analyse banks -- kzbin.info/www/bejne/o5W2ZaFmh5imZrc

[@kaumallose6198]

Thanks for valuable lesson

[@shankarnath]

You are welcome

[@ske1899]

Hey Shankar, Nicely explained!! Appreciate your efforts. Wondering if you have any plans of doing a video on Aswath Damodaran's way of finding an Intrinsic Value of a Stock ??

[@shankarnath]

Thank you. I have no plans presently

[@gauravrace]

Awesome presentation.

[@shankarnath]

Thank you!

[@manishp7206]

Hi Shankar, tried following this with few stocks, but did not get expected output. What happens if the profit growth rate is more than the discount rate in the denominator for Divident Discount Model (like in case of HDFC Bank)? Similarly, what happens if a company is not generating significant cash, like Avenue Supermart? How would cash flow analysis work for such companies?

[@shankarnath]

Hello Manish: 1. The dividend discount model has its cons. Please read this document at leisure for more insights on it: pages.stern.nyu.edu/~adamodar/pdfiles/valn2ed/ch13.pdf 2. I think you mean free cash flow because DMart does have growing & positive operating cash flows but since they are growing, they spend a lot on growth & working capex. In scenarios of you projecting negative FCF (or negative cashflow in other firms) in the future, the result of the DCF would be a negative total present value. You have two options - a) project the FCF in the future such that they eventually turn positive. This will happen at some point for Dmart also and as an analyst, you have determine when b) discard DCF for evaluating Dmart (the same hammer can't be used to shape an ivory statuette and for breaking a mountain)

[@satanite13]

Q: Where did you get the historical data for market cap?

[@RamakrishnaJK]

Excellent Sir.🙏

[@shankarnath]

Thank you!

[@jeetendradhawde6232]

Sir... thankyou for the Excel sheet

[@shankarnath]

Most welcome

[@Swapnilthakkar4755]

Is there any platform that shows Time Value & Intrinsic Value of premiums in their live option chain?

[@shankarnath]

Sorry, I have no idea

[@vamsikrishna24]

Hi Shankar. If you are computing Enterprise Value (Value available to both the debt and equity holders of the company) using the DCF and thus discounting it by the WACC (weighted cost of capital for both debt and equity holders) then in in the final step shouldnt you deduct debt as well in arriving at the equity value? Enterprise value + Cash/Marketable securities - Debt = Equity value

[@shankarnath]

Yes, you are right. Since Infosys barely has debts & what is has is lease obligations, I ignored it. Perhaps I should have taken a different example and clarified the difference between levered and unlevered DCF. So what I did was to find the enterprise value. From here, the debt gets deducted to arrive at the equity value which is then matched with the market cap. So in this case, it will be 5,12,000 crores minus 8,300 crores giving us 5,03,700 crores or 1,202 rupees per share

[@prasadghagare7241]

What I wonder regarding financial statements, can't they be standardized? Can Sebi not enforce a schema on companies to put these number into, this way it would be trivial for computing the indicators for retail investors? May be it's already happening, just trying to understand if such things exist already.

[@shankarnath]

Good thought. Pls pull out a few annual reports to check on the standardization bit

[@mrm-mo7qt]

Why don't you take avarage of previous year cashflows?

[@ishanpandya_]

Because that will only give the cashflow for only one year ahead of the present year so that is why we calculated the FCF on the basis of the assumed growth rate.

[@SrinivasPaulraj]

sir can we consider as discount cash flow method is more reliable than relative and dividend discount model? from your pov please guide me. 😅

[@shankarnath]

Hello. Yes, I prefer DCF over the other two methods.

[@hareshdesai3966]

Excellent presentation

[@shankarnath]

Thanks 🙌

[@goalsignited3474]

Very helpful. Thank you Sir

[@shankarnath]

You are welcome. Glad you liked it 🙌

[@jeevyaballal3264]

Hi Shankar, I'm new to investing.Could you tell me which platform did you use for getting last 10 yrs market cap data?

[@shankarnath]

Hi. I don't use a platform .. I do it manually i.e. pull out the number of outstanding equity shares as of March 31 of that financial year and multiply it with the share price on that date. I also adjust it for bonus or splits.

[@YogeshRathod2303]

@@shankarnath Where can I find no of outstanding equity shares.

[@RecitationBangla]

I really like your videos!!

[@shankarnath]

Thank you so much!

[@TheSigmaEmpire]

Wow amazing content..!

[@shankarnath]

Thank you very much

[@arvindgandhi1007]

Thank you very much.

[@shankarnath]

You are welcome!

[@krushnadeshmukh2489]

More conceptual video like this on investing

[@investwalebhaiya]

Sir, if the operating cash flow is negative for a particular year. How can we proceed?

[@shankarnath]

Hi. I'll take it up in next week's Third Eye

[@investwalebhaiya]

@@shankarnath Thank you Sir.

[@investwalebhaiya]

Sir, Kindly also explain how can we calculate intrinsic value in that case?

[@shankarnath]

Hello, I didn't find a convicing answer to your question. You're on your own on this one. My apologies

[@investwalebhaiya]

@@shankarnath Which valuation method should I follow?

[@kb8519]

Sir, tell pls how to swing trading

[@shankarnath]

Hi, apologies .. I don't understand swing trading, crypto, F&O and technical analysis. I'll try to learn them .. but I don't know any of these as of now.

[@kb8519]

@@shankarnath thank you for the response sir

[@Narayanmbadree]

extremely careful method

[@investwalebhaiya]

How to find maintenance capex, if not explicitly mentioned.

[@investwalebhaiya]

For eg, in case of FACT?

[@shankarnath]

There are a few ways of doing this e.g. Bruce Greenwald simply says Maintanence Capex is equal to Depreciation & Amortization. There is an excellent compilation on this (slightly long read) which is worth an understanding: csinvesting.org/wp-content/uploads/2012/12/A-Thorough-Discussion-of-MCX_Case-Study-and-Capital-Theory.pdf

[@investwalebhaiya]

@@shankarnath Thank you for replying Sir.

[@investwalebhaiya]

@@shankarnath Sir, how to calculate intrinsic value if operating cash flow is negative?

[@ashishasati]

Sir sorry delay..your presentation awsome

[@shankarnath]

Thanks!

[@debusukla]

Excellent explanation

[@shankarnath]

Thanks

[@gagansingh-kb6gu]

Good , need more on valuation of stocks

[@shankarnath]

Thanks for the suggestion

[@vinaytejagunnam8508]

thumbnail ❤

[@anoopg95]

It got changed ?

[@vinaytejagunnam8508]

@@anoopg95 yes