Intrinsic formula on INDIAN STOCKS (NSE/BSE)

Hi guys,

I was calculating the intrinsic value for an Indian stock (KPIT Industries) when I realized that the last row on the intrinsic calculator page (http://buffettsbooks.com/howtoinvestinstocks/course2/stocks/intrinsic-value-calculator.html) talks about the (Discount Rate) 10 year federal note (%) with a link to the US treasury website, which is great, but what do I do about Indian stocks?

I'm terribly confused about this. I've taken the assumption that I can get by with the rate on an Indian government bond
from https://tradingeconomics.com/india/government-bond-yield

I'm not sure if I'm doing this right. Can someone help?

Also, for the Graham formula, which is:

<img src="https://forums.theinvestorspodcast.com/uploads/editor/xu/2y3trjp65jdw.png" alt="" />

Here Y represents the AAA corporate bond rate. What do I do for Indian stocks?

Thanks in advance,
Faiz


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Comments

  • Hi there Faiz,

    Welcome to the site.

    In order to get the intrinsic value calculator to work for Indian stocks simply input all monetary figures in Indian Rupees and use the Indian 10yr Government bond for the discount rate.

    For the Graham formula you would use the average Indian AAA corporate bond rate


    I hope this helps and if you have any other questions don't hesitate to ask.

    Regards,

    Anaximander
  • Thank you so much for your prompt reply, Anaximander!

    Small question, can I use the rate for "Y" in Graham's formula from this link: https://tradingeconomics.com/india/government-bond-yield

    Please do let me know. Thanks.
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