Duff & Phelps launched the sixth edition of our Industry Multiples India report for the quarter ended December 2018. The report provides an overview of the market multiples of companies in 22 major industries in the S&P BSE 500 Index.
- The Indian equity market witnessed a slight improvement during the quarter ended December 2018 primarily due to a sharp decline in crude oil prices.
- The multiples of electric and gas utilities, and independent energy producers have increased due to expectations of revival of power sector in the country. This recovery is anticipated due to widening gap in demand and supply of power, where the demand peaked in 2018 whereas, due to limited capacity addition, the supply has lagged.
- Banks and independent energy & renewable electricity producers witnessed an increase in their median P/E multiples from 14.3x to 18.1x and 7.0x to 8.6x respectively.
- The largest decline in multiples was observed in internet services and healthcare facilities industries, where the median P/E multiples decreased from 22.8x to 17.9x and from 40.6x to 30.2x respectively. Stock prices of majority of the companies in these industries were negatively impacted as a result of weakening global growth prospects, US monetary tightening and rupee appreciation during the period ended December 31, 2018.
- The multiples are based on the market capitalization of the companies and the latest financial metrics available as of December 31, 2018 (for majority of the companies, the financial metrics are available for the period ended September 30, 2018).