Factors Influencing Pricing Multiples in India

Bhargav Maniar

The IUP Journal of Applied Finance, 2014, vol. 20, issue 1, 23-33

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.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjaf:v:20:y:2014:i:1:p:23-33

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