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Stock market fundamental analysis a- z knowledge

 P/E Ratio (Price-to-Earnings Ratio)


Definition:


P/E ratio ek stock ka market price aur uske earnings per share (EPS) ke beech ka relation dikhata hai. Isse pata chalta hai ki investors ek rupee ki earning ke liye kitna paisa dene ko tayar hain.


Formula:


P/E\ Ratio = \frac{Current\ Market\ Price}{Earnings\ per\ Share}


Example:


Company A:


Current Market Price (CMP): ₹500


Earnings Per Share (EPS): ₹25




P/E\ Ratio = \frac{500}{25} = 20


Interpretation:


P/E ratio 20 ka matlab hai investors ek rupee ki earning ke liye ₹20 dene ko tayar hain.


Agar industry average P/E ratio 15 hai, toh Company A overvalued lagti hai.




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P/B Ratio (Price-to-Book Ratio)


Definition:


P/B ratio ek stock ka market price aur uski book value ke beech ka relation dikhata hai. Book value ek company ke total assets minus liabilities hoti hai.


Formula:


P/B\ Ratio = \frac{Market\ Price\ per\ Share}{Book\ Value\ per\ Share}


Example:


Company B:


Market Price per Share: ₹300


Book Value per Share: ₹100




P/B\ Ratio = \frac{300}{100} = 3


Interpretation:


P/B ratio 3 ka matlab hai ki stock apni book value ka 3 guna price pe trade kar raha hai.


Agar P/B ratio zyada ho, toh stock mehnga ho sakta hai. Agar kam ho, toh undervalued ho sakta hai.




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ROE (Return on Equity)


Definition:


ROE ek company ke profit ko uske shareholders ke invested capital ke comparison mein dikhata hai.


Formula:


ROE = \frac{Net\ Income}{Shareholder's\ Equity} \times 100


Example:


Company C:


Net Income: ₹10 crore


Shareholder's Equity: ₹50 crore




ROE = \frac{10}{50} \times 100 = 20\%


Interpretation:


ROE 20% ka matlab hai ki company apne shareholders ke capital par 20% ka return generate kar rahi hai.




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Debt-to-Equity Ratio (D/E Ratio)


Definition:


D/E ratio ek company ke total debt aur shareholder's equity ka relation dikhata hai. Yeh financial risk ko measure karta hai.


Formula:


D/E\ Ratio = \frac{Total\ Debt}{Shareholder's\ Equity}


Example:


Company D:


Total Debt: ₹40 crore


Shareholder's Equity: ₹20 crore




D/E\ Ratio = \frac{40}{20} = 2


Interpretation:


D/E ratio 2 ka matlab hai ki company ke paas equity ke mukable 2 guna debt hai. Zyada ratio ka matlab financial risk zyada ho sakta hai.




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EPS (Earnings Per Share)


Definition:


EPS ek stock ke liye company ki profitability ko dikhata hai. Higher EPS ka matlab hai ki company zyada profit generate kar rahi hai.


Formula:


EPS = \frac{Net\ Income - Preferred\ Dividends}{Weighted\ Average\ Shares\ Outstanding}


Example:


Company E:


Net Income: ₹50 crore


Preferred Dividends: ₹5 crore


Shares Outstanding: 10 crore




EPS = \frac{50 - 5}{10} = ₹4.5


Interpretation:


EPS ₹4.5 ka matlab hai ki har share par ₹4.5 ka earning hai.




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Dividend Yield


Definition:


Dividend yield ek stock ke price ke mukable uske dividend payout ko dikhata hai.


Formula:


Dividend\ Yield = \frac{Annual\ Dividend\ per\ Share}{Market\ Price\ per\ Share} \times 100


Example:


Company F:


Annual Dividend per Share: ₹10


Market Price per Share: ₹200




Dividend\ Yield = \frac{10}{200} \times 100 = 5\%


Interpretation:


Dividend yield 5% ka matlab hai ki stock har saal apne price ka 5% dividend ke roop mein return kar raha hai.




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PEG Ratio (Price/Earnings to Growth Ratio)


Definition:


PEG ratio ek company ke P/E ratio aur uski earnings growth ke beech ka relation dikhata hai.


Formula:


PEG\ Ratio = \frac{P/E\ Ratio}{Annual\ Earnings\ Growth\ Rate}


Example:


Company G:


P/E Ratio: 20


Earnings Growth Rate: 10%




PEG\ Ratio = \frac{20}{10} = 2


Interpretation:


PEG ratio 2 ka matlab hai ki stock expensive hai, kyunki ideal PEG ratio 1 ya uske neeche hoti hai.




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Summary Table:



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Agar aap kisi specific company ka analysis chahte hain, toh unke data ke sath example create kar ke samjha sakte hain!

Intrinsic Value


Intrinsic value kisi stock ka true value ya actual worth hota hai, jo uski future cash flows aur risk factors ke base par calculate kiya jata hai. Iska main goal yeh hota hai ki pata chale ki stock undervalued hai ya overvalued, taaki aap informed investment decisions le sakein.



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Intrinsic Value Calculate Karne ke Methods


1. Discounted Cash Flow (DCF) Method


Yeh sabse common aur trusted method hai, jo ek company ke future cash flows ko present value me convert karta hai.


Formula:


Intrinsic\ Value = \sum \frac{Future\ Cash\ Flows}{(1 + r)^n}


 = Discount rate (Risk ke base par, generally 8-12%)


 = Number of years




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Step-by-Step Example for DCF Method


Example:


Maan lijiye, ek company ke estimated future cash flows kuch is tarah hain:


Year 1: ₹10 crore


Year 2: ₹12 crore


Year 3: ₹14 crore


Discount Rate: 10%



Step 1: Present Value (PV) of Cash Flows Calculate Karna


PV = \frac{Future\ Cash\ Flow}{(1 + r)^n}


For Year 1:


PV = \frac{10}{(1 + 0.10)^1} = \frac{10}{1.10} = ₹9.09\ crore


For Year 2:


PV = \frac{12}{(1 + 0.10)^2} = \frac{12}{1.21} = ₹9.92\ crore


For Year 3:


PV = \frac{14}{(1 + 0.10)^3} = \frac{14}{1.331} = ₹10.52\ crore


Step 2: Total Present Value Add Karna


Total\ PV = 9.09 + 9.92 + 10.52 = ₹29.53\ crore


Step 3: Terminal Value Add Karna (Agar Future Growth Continue Hogi)

Terminal value future cash flows ke beyond growth ko capture karta hai. Formula:


Terminal\ Value = \frac{Final\ Year\ Cash\ Flow \times (1 + g)}{r - g}


Terminal\ Value = \frac{14 \times (1 + 0.04)}{0.10 - 0.04} = \frac{14.56}{0.06} = ₹242.67\ crore


Is Terminal Value ko bhi discount karna hoga:


PV\ of\ Terminal\ Value = \frac{242.67}{(1 + 0.10)^3} = ₹182.37\ crore


Step 4: Total Intrinsic Value Calculate Karna


Intrinsic\ Value = Total\ PV\ of\ Cash\ Flows + PV\ of\ Terminal\ Value


Intrinsic\ Value = 29.53 + 182.37 = ₹211.9\ crore ]


Interpretation:


Agar company ka market capitalization ₹200 crore hai, toh yeh undervalued hai. Agar market capitalization ₹250 crore hai, toh yeh overvalued hai.



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2. Relative Valuation (Using Multiples)


Agar DCF complex lage, toh valuation multiples ka use karke bhi intrinsic value estimate kiya ja sakta hai:


Formula:


Intrinsic\ Value = Industry\ Average\ P/E \times Company\ EPS


Example:


Industry P/E Ratio: 15


Company EPS: ₹20



Intrinsic\ Value = 15 \times 20 = ₹300


Agar stock ka current price ₹250 hai, toh yeh undervalued hai.



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3. Gordon Growth Model (For Dividend Stocks)


Yeh dividend-paying stocks ke intrinsic value calculate karne ke liye use hota hai.


Formula:


Intrinsic\ Value = \frac{D}{r - g}


: Annual dividend


: Required rate of return


: Growth rate of dividend



Example:


Annual Dividend (D): ₹5


Required Rate of Return (r): 10%


Dividend Growth Rate (g): 4%



Intrinsic\ Value = \frac{5}{0.10 - 0.04} = \frac{5}{0.06} = ₹83.33


Agar stock ka current price ₹75 hai, toh yeh undervalued hai.



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Factors Affecting Intrinsic Value


1. Growth Rate: High growth rate ka matlab zyada intrinsic value.



2. Discount Rate: Zyada discount rate se intrinsic value kam hoti hai.



3. Economic Factors: Industry aur market trends impact karte hain.





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Conclusion


Undervalued Stock: Jab intrinsic value current price se zyada ho.


Overvalued Stock: Jab intrinsic value current price se kam ho.



Aap DCF method, relative valuation, ya dividend model use karke apne preferred stock ka analysis kar sakte hain! Specific example chahiye toh mujhe bataiye!


Stock market fundamental analysis a- z knowledge Stock market fundamental analysis a- z knowledge Reviewed by Rikesh on November 21, 2024 Rating: 5

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