DCF Calculator India (2026) – Intrinsic Value & Fair Price Calculator

Calculate the intrinsic value of a company using the Discounted Cash Flow (DCF) model. Estimate future growth, terminal value, and find undervalued stocks in India for 2026.

About | Formula | Example | FAQs

Valuation Details

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Present Value of CF

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Terminal Value PV

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Valuation Summary

Total Intrinsic Value

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Base FCF

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PV of 10-Year Cash Flows PV of Terminal Value
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Valuation Highlights

  • ✅ Uses 10-Year Projections
  • 📈 Gordon Growth Terminal Model
  • 🔄 Instant intrinsic value update
  • ⚡ Visual PV vs TV breakup

Amortized Cash Flow Schedule

See how the projected cash flows are discounted back to their present value over the next 10 years.

Year Projected CF Discount Factor Present Value

How is DCF Fair Value Calculated?

Fair Value = Σ [CFn / (1 + r)n] + [TV / (1 + r)n]

CFn: Cash Flow in year n | r: Discount Rate (WACC)

TV: Terminal Value | n: Year Number

Example DCF Calculation

If a company generates ₹1,00,000 FCF, grows at 15% for 10 years, and we use a 10% discount rate:
  • Total PV of Cash Flows: ₹12,71,324
  • Terminal Value PV: ₹26,98,421
  • Total Fair Value: ₹39,69,745

What is the Discounted Cash Flow (DCF) Model?

The Discounted Cash Flow (DCF) method is a valuation technique used to estimate the value of an investment based on its expected future cash flows. In the context of the Indian stock market, it is widely considered the "gold standard" for calculating the intrinsic value of a company.

The core logic of DCF is the Time Value of Money (TVM). A Rupee today is worth more than a Rupee tomorrow because it can be invested to earn a return. Therefore, we "discount" future cash flows back to their present value using a specific discount rate, often the Weighted Average Cost of Capital (WACC).

Our DCF Calculator India (2026) is designed to handle the complexities of growth projections and terminal value calculations, helping you identify whether a stock is overvalued or undervalued in the current market.

WACC vs Discount Rate – Which to Use?

Choosing the right discount rate is the most sensitive part of a DCF analysis. For most Indian stocks, a discount rate of 10% to 12% is used to account for the risk-free rate (G-Sec yields) and the equity risk premium.

Factor Conservative Aggressive
Discount Rate 12% - 15% 8% - 10%
Growth Rate 5% - 10% 15% - 25%
Fair Value Result Lower Intrinsic Value Higher Intrinsic Value

How to Find Undervalued Stocks Faster?

Once you calculate the Intrinsic Value using our tool, compare it with the current market price of the stock:

Margin of Safety (MoS)

If Intrinsic Value is ₹1000 and Market Price is ₹700, you have a 30% MoS. This provides a cushion against calculation errors.

Buy Opportunity

Terminal Value Check

Ensure Terminal Growth is not higher than the country's GDP growth rate (usually 4-6% for India).

Prevent Overvaluation

DCF Frequently Asked Questions (2026)

1. What is Free Cash Flow (FCF)?
FCF is the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. It is calculated as Operating Cash Flow minus Capital Expenditures (CapEx).
2. Why is Terminal Value important in DCF?
Terminal value accounts for all future cash flows beyond the projection period (usually 10 years). It often makes up 60-80% of the total intrinsic value in a DCF model.
3. How do I choose the Discount Rate?
The discount rate should reflect the risk of the investment. For blue-chip Indian stocks, 9-11% is common. For small-cap or risky startups, 14-18% might be more appropriate.
4. Is DCF suitable for all companies?
DCF works best for companies with predictable and stable cash flows. It is less effective for banks (due to high debt) or early-stage startups with negative FCF.
5. What is the Gordon Growth Model?
It is a formula used to calculate terminal value, assuming the company will grow at a constant rate forever. Formula: TV = [CF_final * (1 + g)] / (r - g).
6. How does inflation affect DCF?
Inflation increases both the growth rate (due to price hikes) and the discount rate (due to higher interest rates). Usually, these offset each other, but high inflation generally lowers DCF values.
7. What is the Margin of Safety?
Popularized by Benjamin Graham, it is the difference between intrinsic value and market price. Investing only when market price is significantly lower than intrinsic value protects against risk.
8. Can intrinsic value change daily?
No, intrinsic value is based on long-term fundamentals. While market price fluctuates daily due to news, intrinsic value only changes when there is a significant shift in business earnings or macro-economic rates.

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Disclaimer

The DCF Calculator provides estimates based on your input parameters. Intrinsic value is highly sensitive to growth and discount rates. This tool is for educational purposes only and does not constitute investment advice.

Last Updated: March 2026