Build a simple DCF: free cash flow of Rs 80 crore next year growing 12% for five years, then 5% forever, discounted at 11.5%, with Rs 150 crore of net debt. What is the equity value, and which assumption moves it most?

Enterprise value is about Rs 1,542 crore and equity value about Rs 1,392 crore after Rs 150 crore of net debt. The five explicit years contribute only about Rs 362 crore; the terminal value contributes about Rs 1,180 crore, 77% of the total. The discount rate moves the answer most: one point either way swings equity from about Rs 1,180 crore to Rs 1,681 crore.

Grow the cash flow, then discount each year by 1.115 raised to the year number. Year 1 is Rs 80 crore; year 5 is 80 x 1.12 to the power 4, about Rs 125.9 crore. Each year's present value comes out near Rs 72 crore, because 12% growth roughly matches the 11.5% discount rate, so the five years together are worth about Rs 362 crore. That neat pattern is a useful check: when growth and the discount rate are close, every explicit year is worth about the same today.

A tenant's rent for the next five years is a small part of what a building is worth; the building's value lies in all the rent after that. The terminal value captures every year after year 5 in one number, so it carries most of the value. Year 6 cash flow is 125.9 x 1.05, about Rs 132.2 crore; divided by 11.5% less 5%, the terminal value at year 5 is about Rs 2,033 crore. Discounted five years, that is Rs 1,180 crore today, 77% of the enterprise value of Rs 1,542 crore. Less Rs 150 crore of net debt, equity is about Rs 1,392 crore.

Flex each one and compare the swing. The discount rate moves it most: at 10.5% equity is about Rs 1,681 crore and at 12.5% about Rs 1,180 crore. Terminal growth comes next, Rs 1,225 crore to Rs 1,620 crore for 4% to 6%, and the five-year growth rate matters least, Rs 1,207 crore to Rs 1,597 crore for 8% to 16%. Both of the big two act through the terminal value, through the gap between the discount rate and growth.

For the panel, that tells you where to spend your defence. Show the terminal value as an implied exit multiple, so it can be compared with what similar businesses trade at, and check that 5% perpetual growth sits below long-run nominal economic growth. The limit of a simple DCF is that every year's cash flow is a single point estimate; the sensitivity table is the honest way to show the panel how much the answer depends on what you assumed.