Factors Influencing Pricing Multiples in India
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-a-vis earlier researches.
With the use of data and concrete examples, such as ::: a mini-case study, and a focus on the top 20 global players, this ::: thesis aims at tackling Capex issues in the telecom industry by ::: covering: – Uses, levels, inefficiencies in Capex management, ::: notably via insider perspective, and their impacts on capital ::: allocation; – Financing of Capex via debt and the recent ::: development of asset monetization; – Specific trends (NSA, VNOs) ::: and M&A in the telecom industry and their impacts on Capex, via ::: the case study of the French SFR-Numericable ::: transaction.