Parag Milk Foods Limited Intrinsic Value
PARAGMILK · Fast Moving Consumer Goods · Current price ₹283.5
Is Parag Milk Foods Limited undervalued?
We estimate the fair value of Parag Milk Foods Limited at ₹293 per share, against a market price of ₹269. That puts the share price about +9.1% below our estimate, at high confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Fair multiple (P/E) (₹288), PEG (growth-implied P/E) (₹311). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Parag Milk Foods Limited spans ₹264 to ₹323. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹269 against an estimated value of ₹293, Parag Milk Foods Limited trades at +9.1%, i.e. a discount to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for Parag Milk Foods Limited. Nothing here is a target price or a forecast of where the share price will go.
The models agree and the inputs are well covered. Treat this as our firmest estimate.
Estimate range ₹264 – ₹323
Why this method for this business
Relative P/E and PEG are appropriate for an asset-light FMCG business with durable earnings power and a narrow moat. DCF is less relevant due to the complexity of cash flow forecasting in a fragmented sector.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
- dcf: Inappropriate for a fragmented FMCG sector with erratic cash flow patterns and high capital intensity
What was missing
- Lack of detailed information on brand equity and customer loyalty metrics
- Limited data on long-term pricing power sustainability
What drives it
17 inputs, grouped by how strong each claim is
- Sector-median P/E
- 25.55×
- Peers used
- 7
- EPS (TTM)
- 10.35 ₹/share
- Own-history median P/E
- 16.35×
- Earnings growth
- 36.6% CAGR
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
computed
- Term: quality
- -8.2%
- Term: growth
- +40.0%
- Term: capital_allocation
- -9.5%
- Term: financial_strength
- +3.9%
- Term: history
- -10.8%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
quality 39/100 (weak/erratic returns) → discount
durable ~30% CAGR (ROCE 14% > hurdle) → premium
capital allocation: falling ROCE / weak cash generation → discount
financial strength: low leverage (D/E 0.4) → mild premium
history: market paid -36% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Premium vs sector
- +9.1%
- Fair-multiple confidence
- 72%
- Fair P/E
- 27.87×
- Growth-implied P/E
- 30×
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
min(growth, 30)
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Parag Milk Foods Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 15 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Parag Milk Foods Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.