Reverse DCF
What growth does the market imply for NTPC?
Working backwards from the current price to find the FCF growth assumption baked in.
very aggressive
21.0% implied annual FCF growth
The market is pricing in exceptional growth that only a handful of companies sustain for a decade. For context, this company has historically grown at 10.5%. High execution risk.
Current Price
₹402
Historical Growth
10.5%
FCF Yield
2.35%
Price / FCF
42.6x
Plain English
To justify today's price of $401.85, NTPC.NS needs to grow its free cash flow at 21.0% per year for the next 10 years. That is 10.5% faster than its historical growth rate of 10.5%. At its historical growth rate, the stock cannot justify its current price within a 20-year horizon. The market is pricing in a step-change in performance.
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Growth Scenarios
What the stock is worth at different growth assumptions
| Scenario | FCF Growth | Implied IV | MoS vs Price |
|---|---|---|---|
| GDP rate | 10.0% | ₹20 | -95.1% |
| Historical | 10.5% | ₹31 | -92.3% |
| Half implied | 10.5% | ₹31 | -92.3% |
| Implied | 21.0% | ₹404 | +0.5% |
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Run Full Analysis →This is an analytical tool, not investment advice. Implied growth is a mathematical inversion of the DCF model and depends on WACC and terminal growth assumptions. YieldIQ is not registered with SEBI as an investment adviser.