Comparable Company Analysis
Value a target by benchmarking its multiples to listed peers. Enter 3–6 comparable companies, then plug in the target's financials to derive implied valuation ranges the way a real IB analyst does it.
Target company financials (₹ cr)
Peer set
| Peer | EV/EBITDA | EV/Sales | P/E | |
|---|---|---|---|---|
| Median | 19x | 4.3x | 27x | |
| Mean | 18.8x | 4.2x | 26.8x |
EV/EBITDAx EBITDA
Low · 15x
₹142
Median · 19x
₹182
High · 22x
₹212
Implied equity/share = (EBITDA × multiple − Net debt) ÷ shares
EV/Salesx Sales
Low · 3.1x
₹147
Median · 4.3x
₹204.5
High · 5.2x
₹252
Implied equity/share = (Sales × multiple − Net debt) ÷ shares
P/Ex PAT
Low · 21x
₹126
Median · 27x
₹162
High · 32x
₹192
Implied equity/share = (PAT × multiple ) ÷ shares
How Comps works
Comparable Company Analysis (a.k.a. "Trading Comps") assumes similar businesses should trade at similar multiples. You pick 4–8 listed peers with comparable size, growth, geography, and margins. You compute their trading multiples today, then apply the median (or a chosen range) to your target's financials. It gives you a relative value what the market is currently willing to pay.
Which multiple, when?
- EV/EBITDA most-used, capital-structure neutral. Best for mature, asset-heavy or leveraged businesses.
- EV/Sales for unprofitable / high-growth (SaaS, e-commerce) where EBITDA is negative.
- P/E banks, insurance, consumer staples. Sensitive to leverage and tax.
- EV/EBIT when D&A varies wildly across peers.
- P/B financials only (banks, NBFCs, insurers).
Building a good peer set
- Same industry and similar business model HDFC Bank vs Kotak, not HDFC Bank vs ITC.
- Similar size band (market cap within ~0.3x–3x of target).
- Similar growth and margins mixing 5% and 30% growers wrecks the median.
- Same geography where possible; otherwise adjust for country risk.
- Exclude one-off outliers (loss-making quarter, pending merger) or footnote them.
Common mistakes
- Using P/E and EBITDA multiples on the wrong denominators (P/E is equity, EV multiples are enterprise).
- Comparing trailing (LTM) multiples for one peer vs forward (NTM) for another. Always be consistent.
- Ignoring non-operating items cash, minority interest, prefs when moving from EV to equity.
- Blindly using the mean when one peer is a huge outlier. Median is safer.
Go deeper
Educational tool. Values are illustrative and not investment advice.