Practitioners have another way to compute TV. They assert that in year T the business sells for a multiple, TV = 12 × EBIT_T, or a multiple of EBITDA or earnings, usually justified as "where comps trade". Investment banks love it. You should understand it and use it as a cross-check, and never let it be the primary method in intrinsic work. There are two reasons, one philosophical and one mechanical.
The circularity. A DCF exists to answer one question: "what is this worth, independent of what the market currently pays?" An exit multiple imports the market's current opinion, so 60 to 80% of your "intrinsic" value turns into a relative valuation in disguise. If comps are in a bubble, your DCF is in the same bubble, wearing a lab coat. You haven't valued the company at all. You've taken the market's mood and extrapolated it to year 10.
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What growth does an exit multiple assume?
The smuggled growth rate. Every multiple is a Gordon formula in compressed form. Set the two TVs equal and you can extract the perpetual growth a multiple assumes. Take the cement build: EBIT₁₀ = ₹26,714 cr, NOPAT₁₁-machinery as in terminal value, WACC 11%. Our Gordon TV of ₹2,01,317 cr equals 7.5× EBIT₁₀. That's the implied exit multiple of sensible steady-state assumptions. Now put a banker's "conservative" 14× exit through the algebra by solving NOPAT₁₀(1+g)(1−g/ROIC_T)/(0.11−g) = 14 × 26,714 for g. The implied perpetual growth is ≈10.0%. That's more than double the 4.5% cap, forever, in a cement business. A 20× exit implies ≈10.5%, because the hyperbola is nearly vertical up there. The multiple felt moderate, and the assumption hidden inside it can't be defended. Running a multiple in and getting implied growth out is your first taste of the reverse-DCF reflex. Relative valuation turns it into a whole toolkit.
The steady-state multiple. Run the value-driver formula as a multiple on this year's NOPAT: EV/NOPAT_T = (1 − g/ROIC_T)(1+g)/(WACC − g). India-typical terminal inputs (WACC ~10.2%, g 4.5%, ROIC_T 25%) give ≈15.0×. US-typical ones (WACC ~8.5%, g 2.7%, ROIC_T 20%) give ≈15.3×. A good mature business supports roughly 15× steady-state earnings in both markets. The extra inflation in India's g cancels against the extra inflation in its WACC. Any multiple above that level is a claim about a super-normal period, growth above maturity for some stretch of time, and never about a steady state. Carry the 15× anchor everywhere. It's what lets you read a 60× P/E, which otherwise just looks large.
When should you use the exit multiple method?
Legitimate uses of the exit multiple. There are three. (1) As the cross-check. Always compute your Gordon TV's implied multiple and ask whether a rational year-10 buyer would plausibly pay it. For a steady cement leader, 7.5× EBIT is plausible. For a decayed brand, 45× is not. (2) When the holding period really is finite and the exit is a sale. Private equity underwrites to exit multiples and does sell in year 5, as in an LBO. (3) When a regulator or a contract fixes the terminal economics. In all three cases, say "exit multiple" out loud, and don't call it intrinsic.