Next, assemble the bridge. Every line is a formula, and every input is pulled:
| Row | Item | Formula / source | ₹ cr |
|---|---|---|---|
| 20 | Σ PV FCFF (FY1–5) | =C15 | 1,034.0 |
| 21 | + PV of TV | =C19*G13 (TV × year-5 DF 0.5674) | 2,774.7 |
| 22 | Enterprise value | =SUM(C20:C21) | 3,808.6 |
| 23 | − Debt (incl. current maturities) | =-Model!G30 | (250.0) |
| 24 | + Cash & liquid investments | =Model!G22 | 400.0 |
| 25 | − Minority interest | ⟦input; see note⟧ | (30.0) |
| 26 | Equity value | =SUM(C22:C25) | 3,928.6 |
| 27 | ÷ Diluted shares (cr) | =Model!G70 | 25.0 |
| 28 | Value per share | =C26/C27 | ₹157.1 |
| 29 | Market price ⟦input + date⟧ | 185.0 | |
| 30 | Upside/(downside) | =C28/C29-1 | (15.1%) |
What belongs in the equity value bridge?
Run the full bridge checklist every time, item by item, even when an item is zero, because the zero is a finding:
- Debt means all borrowings at face, or at fair value if distressed. That includes current maturities, and lease liabilities too if your FCFF excluded rent under the lease-capitalized convention. Apply the lease rule from the multiples work. A lease goes in the flows or in the bridge. It can't go in neither, and it can't go in both.
- Cash and non-operating assets cover cash and liquid investments. They also cover anything the operating forecast doesn't use. Surplus land is one example, and an equity stake in a listed associate is another. Add a stake at market value × holding, with a haircut for tax and liquidity if realization is the story. Never add an asset whose income you also forecast inside EBIT, because that's double counting. Sundar's ₹400 cr earns interest that isn't in EBIT, so adding the cash is correct.
- Minority interest, or NCI, matters because consolidated statements include 100% of a subsidiary's EBIT even when you own 70%. EV built on consolidated FCFF therefore includes value that isn't yours. Subtract NCI at market value if you can, or at an earnings-multiple estimate. Book value is only the floor.
- Preferred stock and quasi-debt go in at redemption or fair value.
- A pension deficit goes in net and after tax, where it's material. It's borrowed money owed to workers.
- For options and ESOPs, one route is treasury-stock-method diluted shares, where new shares = options × (1 − strike/price). Say 8 cr options are struck at ₹50 and the stock is at ₹90. They add 8 × (1 − 50/90) = 3.56 cr shares. Damodaran's more rigorous route subtracts the options' value from equity value and divides by actual shares. TSM is the market convention. Just know that it uses price where value belongs, and that it understates dilution for long-dated options.
Worked example: Sundar Foods' value per share
For Sundar, that's 3,808.6 − 250 + 400 − 30 = 3,928.6 over 25 cr shares, or ₹157 against a ₹185 price. Hold that thought through the sensitivity table and the football field. A point estimate is only the middle of a range you haven't drawn yet.