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Factors Influencing Pricing Multiples in India

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  • Bhargav Maniar

Abstract

The study attempts to understand the various factors influencing popular pricing multiples in the Indian context. The accounting fundamentals, as observed by earlier researches, and return on investment are considered as factors influencing pricing multiples. The reference securities are adopted from the Nifty index. 1-year return found significance in three models—P/E, EV/EBITDA and Price to Sales. Next year growth in earnings, market beta, dividend payout ratio, return on equity and profitability margin are important for certain specific multiples. The models follow intuitive inferences (e.g., margin as a factor influencing sales multiple), show importance of absolute return on investments and analyst forecasts (growth next year) vis-à-vis earlier researches.

Suggested Citation

  • Bhargav Maniar, 2014. "Factors Influencing Pricing Multiples in India," The IUP Journal of Applied Finance, IUP Publications, vol. 20(1), pages 23-33, January.
    • Handle: RePEc:icf:icfjaf:v:20:y:2014:i:1:p:23-33
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    Cited by:

    1. Antonio J. Dayag & Fernando Trinidad, 2019. "Price-Earnings Multiple as an Investment Assessment Tool in Analyzing Stock Market Performance of Selected Universal Banks in the Philippines," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(4), pages 17-33, July.

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