What Is a Stock REALLY Worth? DCF Explained for Beginners | Value Investing Classroom

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A stock at ₹500 — cheap or expensive? The price tag tells you nothing. In this classroom session we walk through the 5 metrics inside our research journal: earnings yield, ROCE vs cost of capital, free cash flow vs profit, the DCF (with a fully worked example), and margin of safety. No finance degree needed — just a mango tree and some simple math.

Chapters:
0:00 Hook: what is a stock really worth?
0:40 Disclaimer
1:04 Price vs value
1:46 Metric 1: earnings yield
3:06 Metric 2: ROCE vs cost of capital
4:20 Metric 3: free cash flow vs profit
5:22 Metric 4: the DCF idea
6:22 DCF worked example
8:30 DCF sensitivity: assumptions are the game
9:36 Metric 5: margin of safety
10:35 Close: our screen's engine

The 5 metrics:
1. Earnings yield (E ÷ P) — does the price pay you more than a bond?
2. ROCE vs cost of capital — is it actually a good business?
3. Free cash flow vs reported profit — profit is an opinion, cash is a fact.
4. DCF — future cash, discounted to today, added up. Worked example: ₹1,000 cr FCF growing 12% → ₹2,000/share value vs ₹1,550 price (illustrative numbers).
5. Margin of safety — pay 78 paise for ₹1 of value; we want 25–30%+.

All company names are teaching examples with illustrative numbers, not valuations or recommendations.

Educational content only — not financial advice. We're not SEBI-registered investment advisors. This is our research journal, not a recommendation. Do your own research and consult your financial advisor before acting on anything here.

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