DCF Decode

  Unlevered Discounted Cash Flow (DCF) Valuation for Polycab India Ltd Executive Summary This unlevered DCF model values Polycab India Ltd, India's largest manufacturer of wires and cables. The company has established itself as a market leader with a strong presence across multiple segments including wires, cables, fast-moving electrical goods (FMEG), and EPC projects. This analysis projects Polycab's free cash flows over a 10-year forecast period, discounted at an appropriate rate to determine enterprise value. Company Overview Polycab India Ltd is a market leader in the Indian wire and cable industry with a diversified product portfolio. The company has been expanding its FMEG business and has a strong distribution network across the country. Polycab has demonstrated consistent growth over the years, driven by infrastructure development, increasing electrification, and government initiatives like "Make in India" and "Digital India." Key Assumptions G...

🐂 Rakesh Jhunjhunwala’s Stock-Picking Methodology: A Guide for Retail Investors Rakesh Jhunjhunwala, often called the "Warren Buffett of India," was one of the most successful investors in Indian stock market history. Starting with just ₹5,000 in 1985, he built a portfolio worth over ₹30,000 crores by the time of his passing in 2022. This article breaks down his stock-picking approach in a step-by-step manner — so you, as a retail investor, can learn to think like him. 1. 🎯 Invest in What You Understand (Circle of Competence) Jhunjhunwala only invested in businesses he could understand well . If he couldn’t explain how a company makes money in simple terms , he wouldn’t invest. ✅ Lesson : Don’t chase hype. Invest in companies and industries you understand — like FMCG, retail, banks, or consumer products. 2. 🧮 Focus on Fundamentals (Not Just Stock Price) He was a fundamental investor — meaning he studied the company's financials , management, growth pote...

📘 DCF Valuation of Polycab India Ltd. – May 2025 🎯 Objective The goal of this analysis is to estimate the intrinsic value of Polycab India Ltd. using the Discounted Cash Flow (DCF) method, specifically focusing on Free Cash Flow to the Firm (FCFF) . This method aligns with the CFA curriculum’s principles on valuation. 🏗️ DCF Valuation Framework Formula for Enterprise Value (EV): E V = ∑ t = 1 n F C F F t ( 1 + r ) t + T V ( 1 + r ) n​ Where: F C F F t FCFF_t  = Free Cash Flow to the Firm in year t r r  = Discount rate (WACC) T V TV = Terminal Value Formula for Equity Value: E q u i t y   V a l u e = E V − N e t   D e b t Equity \ Value = EV - Net \ Debt Intrinsic Value per Share: I n t r i n s i c   V a l u e = E q u i t y   V a l u e S h a r e s   O u t s t a n d i n g Intrinsic \ Value = \frac{Equity \ Value}{Shares \ Outstanding} ​ 📘 What is FCFF? Free Cash Flow to Firm (FCFF) is the cash available to all providers of capital ...