Axis Bank Limited - DCF Valuation Calculator
The data below uses Axis Bank Limited (AXISBANK) book value as on 2026-March
DCF valuation model assumptions and factors to consider
- Model assumes that in terminal stage company growth will match inflation.
- The company should have pricing power to increase its product price with inflation. For weak moat companies one should not use this model.
- If company has margin contration or expansion cycles, then average ROE should be adjusted to handle cycles.
- If company has high margin which may not be accepted by regulators or society, it should be adjusted in ROE and growth. E.g. Indian Asset management industry was working on high marging in early stage which got regulated later to a reasonable value. Another example is pharms companies having too much margin which regulators may rationalize in future. When in doubt take a value from mature markets in other countries if available. Or use a conservative future value to have a margin of safety for future surprise.
- If company is working on margins which are not sustainable, then ROE and growth should be reduced accordingly.
- Model assumes that the business has almost infinite longivity (50+years)
- If a business has significant disruption risk, this DCF calculator should not be used. e.g. A gold mining company will be disrupted when all mineable gold revseves on earth have been mined unless they expand into another business.
- Business (or it promoters) should have history of good corporate governance practices for last 5-10 years. Avoid using this model on completely new business.
- High debt businesses with low cash buffer may go in distress multiple times in long term market cycles. So average roe and growth should be reduced to get a more realist DCF value.
- A business reaches its terminal stage when it is has expanded to reach its share of TAM (Total addressable market). e.g. We can assume that top 5 banks will take 60-70% of lending TAM with each bank taking approx 12% share of TAM.
- Avoid sectors where companies compete on margins and eventually follow race to bottom where either they close down or become commodity businesses. E.g. A pure brokerage business without any moat can be evaluated for this category unless it expands into other businesses with some moat. If there is some regulator protection (e.g. limited licenses), then it can be considered some moat.