Reverse DCF
What growth does the market imply for CUMMINSIND?
Working backwards from the current price to find the FCF growth assumption baked in.
very aggressive
24.0% 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 2.4%. High execution risk.
Current Price
₹5,622
Historical Growth
2.4%
FCF Yield
1.22%
Price / FCF
82.1x
Plain English
To justify today's price of ₹5621.50, CUMMINSIND.NS needs to grow its free cash flow at 24.0% per year for the next 10 years. That is 21.5% faster than its historical growth rate of 2.4%. 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 |
|---|---|---|---|
| Historical | 2.4% | ₹1,052 | -81.3% |
| GDP rate | 10.0% | ₹1,896 | -66.3% |
| Half implied | 12.0% | ₹2,215 | -60.6% |
| Implied | 24.0% | ₹5,622 | +0.0% |
At Historical Growth Rate
DCF horizon: 10 years. At 2.4% growth, the model values CUMMINSIND at ₹1,052, below today's ₹5,622.
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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.