LT.NS
LARSEN & TOUBRO LTD.OpenLT.NS discounted cash flow valuation
LT.NS Fair Value
Reverse DCF: today's price implies 14.6% a year of FCF growth for years 1–5, against 18.9% in this model.
Model: 18.9% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 7.03% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | INR 1.96T |
|---|---|
| PV of terminal value (72% of EV) | INR 5.00T |
| Enterprise value | INR 6.95T |
| + Cash & investments | INR 766.15B |
| − Total debt | −INR 1.25T |
| Equity value | INR 6.46T |
| ÷ Shares outstanding | 1.38B |
| Value per share | INR 4,698.69 |
| Market cap | INR 4.99T |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.52 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 7.83% |
| Pre-tax cost of debt | 5.22% |
| Tax rate | 26.2% |
| Debt / (equity + debt) | 20.1% |
| WACC | 7.03% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.03% | 6,644.19 | 7,665.49 | 9,090.28 | 11,216.69 | 14,732.60 |
| 6.03% | 4,978.53 | 5,543.50 | 6,268.40 | 7,232.38 | 8,577.20 |
| 7.03% | 3,920.75 | 4,271.10 | 4,698.69 | 5,232.28 | 5,916.91 |
| 8.03% | 3,191.26 | 3,425.26 | 3,701.50 | 4,032.59 | 4,436.67 |
| 9.03% | 2,659.01 | 2,823.69 | 3,013.53 | 3,234.80 | 3,496.01 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (FY2026) | — | INR 119.32B | — | — |
| Year 1 | 18.9% | INR 141.87B | 0.934 | INR 132.55B |
| Year 2 | 18.9% | INR 168.68B | 0.873 | INR 147.25B |
| Year 3 | 18.9% | INR 200.56B | 0.816 | INR 163.58B |
| Year 4 | 18.9% | INR 238.47B | 0.762 | INR 181.72B |
| Year 5 | 18.9% | INR 283.54B | 0.712 | INR 201.88B |
| Year 6 | 15.6% | INR 327.83B | 0.665 | INR 218.08B |
| Year 7 | 12.3% | INR 368.28B | 0.622 | INR 228.90B |
| Year 8 | 9.1% | INR 401.65B | 0.581 | INR 233.24B |
| Year 9 | 5.8% | INR 424.86B | 0.543 | INR 230.52B |
| Year 10 | 2.5% | INR 435.49B | 0.507 | INR 220.76B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.