During the fourth quarter of 2017, Indian equity markets traded near record highs, driven by major economic and political factors, including the Gujarat and Himachal Pradesh elections and recent “big bang” reform announcements. The growth of median multiples across many industries in India from September 30, 2017 to December 31, 2017 is a further reflection of the market’s buoyancy. 

An increase in equity markets volatility was observed following the union budget announcement on February 1, 2018. Traders and investors remained skeptical about the imposition of long-term capital gains tax on the sale of equities and equity mutual fund units. On the positive side, the corporate tax rate for companies with turnover of less than INR 250 crores was reduced from 30 percent to 25 percent. The following sectors have realized the greatest expansion and contraction in P/E multiples over the last quarter:

  • Household Appliances multiples increased from 46.6x to 60.6x, and Internet Software and Services multiples increased from 14.9x to 19.2x.
  • Specialized Finance multiples decreased from 17.4x to 15.9x, and Healthcare Facilities and Services multiples decreased from 48.3x to 43.3x. 

Read the report for more detail on multiples trends for 22 major industries in India.

Duff & Phelps Industry Multiples in India Q4 2017.pdf (4.3) MB

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