DCF based investment strategies

Stock Opportunities Not-so-Hidden Gems
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As note of introduction recently joined the forum (Novice Investor)

I have created a Tradingview script for my valuation for individual stocks i try to invest based on the signals and the companies fundamentals strictly focusing on the numbers and the companies actual activities and history .
Based on the script (refer screen shot) :
This script for DCF

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DCF Model – Inputs & Computation

1. Forecast Settings

  • Forecast Period: 10 years

  • Valuation Metric: FCF per Share

  • Custom Growth: 12%

  • Terminal Growth: 6%

  • Minimum WACC–Terminal Growth Spread: 1%

2. Cost of Capital

  • Cost of Equity (Ke): 9.22%

  • Cost of Debt (Kd): 9.12%

  • Debt Weight: 13.49%

  • Equity Weight: 86.51%

  • WACC: 9.20%

  • Beta: 0.608 (Estimated Beta)

  • Tax Rate: 25.17%

3. Growth Inputs

  • Custom Growth: 12%

  • Observed Growth: 54.06%

  • Implied Growth: 9.32%

  • Terminal Growth: 6%

  • Observed Growth Method: Maximum

4. Reinvestment Inputs

  • Reinvestment Return: Average ROIC

  • Retention Metric: Average Retention

  • Current ROIC: 47.29%

  • Incremental ROIC: 44%

  • Retention Ratio: 92.07%

5. Growth Computations

  • Sustainable Growth Rate = Average ROIC × Average Retention

  • Incremental ROIC = ΔNOPAT / Δ(Debt + Equity − Cash)

  • Incremental ROIC Growth = Incremental ROIC × Retention Ratio

  • Observed Growth = Maximum selected historical growth rate

6. DCF Computations

Four valuation scenarios:

  1. Custom Growth DCF

  2. Sustainable Growth Rate DCF

  3. Incremental ROIC Growth DCF

  4. Observed Growth DCF

For each scenario:

  • Forecast annual FCF per share.

  • Discount forecast cash flows using WACC.

  • Calculate terminal value using Gordon Growth.

  • Discount terminal value to present value.

  • Sum present values to arrive at intrinsic value per share.

7. Peer Beta Inputs

  • Peer levered betas

  • Peer debt/equity ratios

  • Peer tax rates

  • Peer unlevered beta median

  • Target debt/equity ratio

  • Target tax rate

Beta is estimated by unlevering peer betas and relevering the peer median using target capital structure.

8. Additional Financial Metrics

  • NOPAT: ₹4.77 billion

  • Change in Invested Capital: ₹5.52 billion

  • Current ROIC: 47.29%

  • Incremental ROIC: 44%

  • WACC: 9.20%

  • ROIC − WACC: 34.79%

, Though currently the capital structures have substancially changed based on the acqusition of the transmission company resulting in extreme fluctuation in current year on TTM basis so i have not modified it till i get the annual figure , please refer the TTM analysis for now ,

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i have made a sizable portion of my small portfolio in this based on the companies performance and current pricing.
The recent concall suggest a temporary flucuation in margin , but the diversfication in adjacent and downstream value chain such as transmission , BESS and power production should have a long term improvement . (Note i had my purchase in september 2026 , my average sits at 874 currently down 20%)

would like an opinion on my view and my methology any tips for improvement is much appreciated.

(Please note I’m not a SEBI registered Research Analyst)

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