ETERNAL.NS · NSI · Consumer Cyclical

Eternal Limited

Also onConsensus Drift

Implied value per share

INR -32.23

Market price

INR 326.85

Implied upside

-109.9%

5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

NoteRisk-free rate is an assumption: INR assumption - no free live source available for this market.

Current EV/EBITDA of 193.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

Value Per Share

Perpetuity growth

INR -32.23-109.9%

Exit multiple

INR -145.03-144.4%

Market price

INR 326.85

Same forecast, different terminal treatment. Percentages vs price.

Assumptions

Discount rate (WACC)10.66%Growth after the forecast2.50%Exit EV/EBITDA20.0xTax rate25.20%Capex, % of revenue2.77%Depreciation, % of revenue4.44%Working capital, % of revenue growth3.60%

Forecast Cashflows

Reporting currency (INR). Outflows negative.

Nominal FCFFDiscounted to todayINR

Line	FY27	FY28	FY29	FY30	FY31	CAGR
Revenue	INR 815.5bn	INR 1223.2bn	INR 1834.8bn	INR 2752.2bn	INR 4128.3bn	+50.0%
EBIT	INR -52.5bn	INR -78.8bn	INR -118.2bn	INR -177.2bn	INR -265.8bn	-50.0%
NOPAT	INR -39.3bn	INR -58.9bn	INR -88.4bn	INR -132.6bn	INR -198.9bn	-50.0%
Add depreciation & amortisation	INR 36.2bn	INR 54.3bn	INR 81.4bn	INR 122.2bn	INR 183.2bn	+50.0%
Less capital expenditure	INR -22.6bn	INR -33.9bn	INR -50.8bn	INR -76.3bn	INR -114.4bn	+50.0%
Less increase in working capital	INR -9.8bn	INR -14.7bn	INR -22.0bn	INR -33.0bn	INR -49.5bn	+50.0%
Free cashflow to firm	INR -35.5bn	INR -53.2bn	INR -79.8bn	INR -119.7bn	INR -179.5bn	-50.0%
Discount factor	0.9506	0.8590	0.7762	0.7014	0.6338	-
Present value	INR -33.7bn	INR -45.7bn	INR -61.9bn	INR -83.9bn	INR -113.8bn	-35.5%
Present Value Of The Forecast	INR -339.1bn

Discount Rate

Source shown per component. All overridable above.

Risk-free rate	6.80%	INR assumption - no free live source available for this market (assumption)
Equity risk premium	8.00%	Market assumption
Beta	0.487	Reported 0.234, pulled toward 1.0 (Blume)
Cost of equity	10.69%	Risk-free + beta x equity risk premium
Cost of debt	11.69%	Interest expense / average total debt
Market capitalisation	INR 3008.8bn	98.5% of capital
Total debt	INR 45.9bn	1.5% of capital, book value as a proxy
Tax rate	25.2%	Effective, capped at statutory
WACC	10.66%	E/V x Re + D/V x Rd x (1 - t)

Terminal Value

Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

Perpetuity growth at 2.50%

Value per shareINR -32.23

0% of EV

Terminal value, undiscounted: INR 0.00
Terminal value, discounted: INR 0.00
Enterprise value: INR -339.1bn
Less net debt: INR -39.9bn
Equity value: INR -299.1bn

Exit at 20.0x EBITDA

Value per shareINR -145.03

76% of EV

Terminal value, undiscounted: INR -1652.1bn
Terminal value, discounted: INR -1047.1bn
Enterprise value: INR -1386.1bn
Less net debt: INR -39.9bn
Equity value: INR -1346.2bn

Sensitivity

Value per share (INR) by discount rate and long-run growth.

Long-run growth
Discount rate	1.50%	2.00%	2.50%	3.00%	3.50%
8.66%	-34.35	-34.35	-34.35	-34.35	-34.35
9.66%	-33.27	-33.27	-33.27	-33.27	-33.27
10.66%	-32.23	-32.23	-32.23	-32.23	-32.23
11.66%	-31.23	-31.23	-31.23	-31.23	-31.23
12.66%	-30.27	-30.27	-30.27	-30.27	-30.27

Outlined: this model. Green text: above today's price of 326.85. Shading: distance from this model's own value.

Priced In

What each input would have to be to justify the current price, one at a time.

Input	Model	Implied	Gap
EBIT margin	-6.4%	10.5%	+17.0pp

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Live formulas, not pasted numbers - edit a driver and the workbook reprices.

Yahoo Finance and RBA data. General information, not advice. Methodology.