Noted that Indus tower made huge provision for bad and doubtful debt in its balance sheet.
In case of valuation based on DCF, since these provision are non cash items, are added back to arrive at Free cash flow. Since FCFF calculation ignore such bookish provision, the enterprise value arrived based on such FCFF must be inflated.
The question arise is how to incorporate valuation detoriation due to such doubtful debts.
One view is to reduce the Enterprise value arrived based on FCFF from such doubtful debts to arrived at detoriated value.
Any alternate view is invited.