Valuation of Indian Companies – An Analytical Perspective

Abstract

This research paper focuses on an analytical valuation perspective of Indian companies. Five top companies from each of these sectors were selected on the basis of cumulative sales in the last ten-year period (1997–2006). These five top companies in each sector were selected from the total sample of 8500 companies. The companies were valued on the basis of eight financial parameters. The IT sector and infrastructure sectors have the highest average sales growth rate with three companies from each sector figuring in the top ten list. Idea Cellular had the highest average growth rate in sales for the past decade. The most valuable company in terms of average market capitalization was ONGC followed by Reliance Industries Ltd. and Hindustan Lever Ltd. respectively. On the basis of Tobin q ratio, TCS is the most valuable company followed by Infosys, Wipro and Satyam respectively. The regression results show that that the value of a firm is positively related to sales growth and asset growth. Higher the debt component of the capital structure of a firm, lower will be the value of firm.

Financial determinants of value based performance of construction firms in India

“…This review has established that Tobin's Q is the most popularly used value-based performance measure (Gugler et al , 2008; Kumar and Suhas, 2008; Chauhan et al , 2016; Wei et al , 2005; Gunasekarage et al , 2007; Kohlbeck and Mayhew, 2010; Endri and Fathony, 2020) along with EVA, MVA, etc.…”

“…Further, it is assumed that firms of the peer group behave almost similarly in an industry and their valuation should have similar base. Hence, the total MCAP, which is about the number of shares outstanding at a given time multiplied by market price can be considered as true firm value (Kumar and Suhas, 2008; Vélez-Pareja and Magni, 2009; Kohlbeck and Mayhew, 2010; Liow, 2010).…”

Convergence Of Ind AS: Challenges and Benefits in Implication of Accounting Standards

“…To know the effect and implications of IFRS, Anubha Srivastava (2020) attempts to study the differences between IGAAP and IFRS and found out that IFRS will reduce equity costs and frauds. Some studies revealed that the firsttime adoption of IND AS in the IT companies has no significant difference in the profitability due to transition (Kumar & Agarwal, 2020). Another side Teena Thomas and Tomy Mathew (2019) found out in their study that there is a significant difference in debtequity ratios on implementation of IGAAP and IND AS in energy sector.…”