Valuing the S&P BSE SENSEX: All is Fair in Love and Markets

I was always amazed at how Prof. Aswath Damodaran could find methods to Value anything that moves (Kidding, of course). One of those moments came a few months back, when I saw and read the way he came with an innovative method to Value the S&P 500 Index based on a sort of Dividend Discount Model: Valuing the S&P 500

After many months of idle admiration, here’s my naive attempt at replicating that model. I have tried to find the Market-implied Fair Value of the S&P BSE SENSEX using market metrics like Dividend Yield, Risk-free Rate and Equity Risk Premia. All comments and criticisms are solicited.

The Model (You can download the file via File → Download As)

I also made a blog post on the same:

What with debates raging on about whether the broad market indices are overvalued are not, I thought this would be the perfect time to do this. I hope this sparks some interesting conversations.

Yours truly,
A humble student of Valuation


respected sir,

Please write some more details in DCM method in valuemotion…i am really struggling to know which value bought it from annual report of which column…

Please re-write blog to understand layman like me


I have provided the following screenshot in the blog, which shows where the information have been picked from:

Immediately below, I have mentioned where I have obtained this information:

I will explain in short where I obtained all this data:

2017-18 Q4 Report / Full Year Results

Previous Sales
Operating Income
Minority Interests (Actual Minority Interests of 4.27 multiplied by 4.5, the Basmati Rice industry’s average P/B Ratio)
Cash Equivalents
Number of Shares

Other Online Sources

Cost of Debt (AA Rated Corporate Debt instruments are trading at a range of 7.5%-8.00%)
Company Beta
Industry Beta (Kohinoor and LT Foods)
Industry D/E (Kohinoor and LT Foods)


Tax Rate (Assumed at 25%, the Corporate Tax Rate in India)
Indexed Returns (Long-term CAGR of NIFTY chosen over the short-term CAGR which is too high at 25%+)

If you still have doubts regarding a specific figure, please reach out to me,

Sorry about the double post. I made a blog post of the same, to help clear up things about how I went about doing this:

Blog post link added to the original post as well.

Sorry to say this…none of the fields i am able to understand where to pick up…

I’m not sure how I can help you further. I’ve provided a screenshot. I’ve given a note of where I’ve taken the data from.

I’m sure if you go through the Q4 Report, you’ll notice the figures.

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