The Discounted Cash Flow (DCF) Model

Module 3, Chapter 15
Version 1.0

Free Cash Flow Estimate (In INR Crs)

2011 - 12 2012 - 13 2013 - 14
Net cash from Operating Activities 296.3 335.4 278.7
Capital Expenditures 86.6 72.5 330.3
Free Cash Flow (FCF) 209.7 262.9 (51.6)
3 Year Average Free Cash flow 140.3

Inputs Cash flow & Present Value Table

Number of years considered 10 Sl No
FCF Growth rate for first 5 years 18% 1
FCF Growth rate for last 5 years 10% 2
Terminal Growth Rate 3.50% 3
Discount Rate 9% 4
5
Intrinsic Value Calculation (INR Crs, unless indicated) 6
Total PV of cash flow 6,078.68 7
Total Debt 75.94 8
Cash & Cash Balance 294.50 9
Net Debt (218.56) 10
Share Capital 17.08
Face Value (INR) 1.00 Terminal Year
Number of Shares 170,810,000 Terminal Value
Share Price (INR) 368.67 PV of Terminal Value

Intrinsic Value Band

Model Error leeway 10%
Lower Intrinsic value band 331.8
Upper Intrinsic value band 405.5

Disclaimer – This DCF model is for educational purpose only.

ash flow & Present Value Table
Year Cash flow f Cash flow
2014 - 15 165.61 151.93
2015 - 16 195.41 164.48
2016 - 17 230.59 178.06
2017 - 18 272.09 192.76
2018 - 19 321.07 208.67
2019 - 20 353.18 210.59
2020 - 21 388.50 212.52
2021 - 22 427.35 214.47
2022 - 23 470.08 216.44
2023 - 24 517.09 218.42

erminal Year 2023 - 24

erminal Value 9,730.67
V of Terminal Value 4,110.34