Comparable Companies
Builds a peer set of similar listed or recently transacted companies and applies their blended multiples, adjusted for size and quality.
How it works
- 1
Select peers matched on sector, business model, growth profile and scale.
- 2
Pull each peer's EV/Revenue and EV/EBITDA multiple.
- 3
Compute a blended average, weighting the peers you consider most comparable more heavily.
- 4
Apply an illiquidity and size discount — private Indian mid-market companies typically trade 25%–40% below listed peers.
- 5
Apply the discounted multiples to your own revenue and EBITDA and blend the two answers.
Sample: a mid-sized Indian specialty chemicals manufacturer
| Your revenue | ₹60,00,00,000 |
| Your EBITDA | ₹9,00,00,000 (15%) |
| Peer A | EV/Revenue 2.4× · EV/EBITDA 14.0× |
| Peer B | EV/Revenue 1.8× · EV/EBITDA 11.5× |
| Peer C | EV/Revenue 2.1× · EV/EBITDA 12.5× |
| Step | Formula | Result |
|---|---|---|
| Blended peer EV/Revenue | (2.4 + 1.8 + 2.1) ÷ 3 | 2.1× |
| Blended peer EV/EBITDA | (14.0 + 11.5 + 12.5) ÷ 3 | 12.67× |
| Apply 35% private-company discount | 2.1 × 0.65 and 12.67 × 0.65 | 1.37× revenue and 8.23× EBITDA |
| Revenue-based value | 60,00,00,000 × 1.37 | ₹82,20,00,000 |
| EBITDA-based value | 9,00,00,000 × 8.23 | ₹74,07,00,000 |
| Blend (50/50) | (82,20,00,000 + 74,07,00,000) ÷ 2 | ₹78,13,50,000 |
The two multiples land within 10% of each other, which is a good sign that the peer set is genuinely comparable. A wide gap usually means the margin profile differs from the peers.
- Sectors with a deep set of listed Indian peers — chemicals, pharma, IT services, consumer.
- Market-anchored valuations that a buyer or investor can independently verify.
- Cross-checking a DCF output against what the market actually pays.
- Niche or first-of-kind businesses with no true peers.
- Sensitive to the discount applied for size and illiquidity, which is a judgement call.
- Peer multiples move with market sentiment, so the answer shifts even when your business has not changed.
Valuenomic runs this method alongside five others and weights the results.