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CMA Sandip Framework © · Glossary
Reverse DCF
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A regular DCF starts with growth assumptions and calculates a fair price. Reverse DCF flips that: it starts with the current market price and works backward to figure out what growth rate the company would need to deliver to justify that price. This is often more useful than a regular DCF because it removes your own assumptions from the picture — instead of debating 'what growth rate should I assume,' you're asking 'what is the market already assuming, and does that seem reasonable given the company's track record?' If the implied growth rate looks wildly higher than anything the company has ever achieved, that's a genuine caution flag, even if you can't say exactly what the 'right' price should be.

In practice: For Mahindra & Mahindra, the current price roughly implies a 15% revenue CAGR through FY28 — demanding, but not unreasonable given the company's own 22% 5-year track record. That's a very different signal than if the implied growth had been 40%.
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