Fundamental Glossary / Valuation Ratios
Intrinsic Value
An estimate of what a business is worth based on the cash it can produce, rather than the price on the screen today.
Formula
There is no single formula. Discounted cash flow, dividend discount, and asset-based models are common routes to an estimate.
What it means
Intrinsic value is the analyst's answer to "what is it worth," independent of the last traded price. Benjamin Graham described it as the value justified by the facts: assets, earnings, and dividends.
Because the future is uncertain, intrinsic value is a range. Small changes in growth or the discount rate move the estimate a lot.
How to read it
The useful comparison is price versus your range. If the market price sits below the low end of a conservative range, the shares may offer a margin of safety. If it sits above the high end, the market is paying for a story you have not underwritten.
What to watch
A precise single-rupee intrinsic value is false precision. Publish the assumptions. Two honest estimates can differ because the growth rate, the margin, or the cost of capital differs, not because one person owns a secret formula.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.