The levelled growth rate essentially says that the company will grow at that rate forever. Well, at least until the denominator, the discounting rate becomes substantially higher than the numerator (Which is EPS * (1+growth)).
So when you change the levelled growth rate, you’re simply seeing the compounded effect of that 0.4% change for a long long time (Say 80 years).
A few suggestions:
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Growth rate should be the long term compounded growth rate. Short term bursts of growth doesn’t mean that the company will grow at that rate going forward.
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Length of high growth (Before levelling off) could be anywhere between 10-20 years, depending on the type of company. Really excellent companies, with huge moats and superior pricing power can growth at a decent pace for more 20 years. But exercise caution.
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The discounting rate should be higher than the Risk free Rate (Which is 7.5% in India now). Ideally though, feel free to use 12-15%. This is what you would earn on investing in the NIFTY or the SENSEX for a really long time.
In the end, like I already mentioned, finding out the Value of a company with 2-3 numbers and the click of a button is too simple. It’s a better starting point than a P/E Valuation, but it’s not the be all and end all of Value. This is what I use to Value prospective equity investments: