relative-valuation-indialisted

# Relative Valuation (India) Multiples are not a valuation method. They are a way of asking "what is the market assuming about this company relative to that one?" Used carelessly they smuggle in every assumption you thought you were avoiding. ## Choosing the multiple | Multiple | Use for | Breaks when | |---|---|---| | **EV/EBITDA** | Capital-intensive, differing leverage, cross-border comps | Ind AS 116 makes lease-heavy businesses look artificially cheap; ignores capex intensity | | **EV/EBIT** | Comparing across different asset lives | Depreciation policy differences | | **P/E** | Stable, profitable, similar leverage | Loss-making, cyclical peaks/troughs, differing tax regimes | | **P/B** | Banks, NBFCs, insurance, asset-heavy | Asset-light businesses; understated legacy land at cost | | **P/ABV** | Lenders — see `bank-nbfc-analysis` | | | **EV/Sales** | Pre-profit growth, or a full cyclical trough | Says nothing about profitability | | **PEG** | Growth companies | Growth rate is an estimate; PEG is two estimates stacked | | **EV/Capacity** (per tonne, per MW, per room, per subscriber) | Cement, power, hotels, telecom | Ignores utilisation and pricing | | **Mcap/AUM, P/E on core** | Asset managers, holdcos | | **Rule:** use at least two multiples with different denominators. If P/E and EV/EBITDA disagree, the gap is leverage, other income, or tax — find out which. ## Building the comp set An Indian comp set is not "companies in the same sector on the exchange". Scree