Industry Multiples in India Report 2023 - 21st Edition

June 2023 Foreword Dear Readers, We are pleased to launch the 21stedition of our Industry Multiples in India. This report provides an overview of trading multiples for various keyindustries in India as of June 30, 2023, using constituents belonging to the Standard and Poor’s (S&P) BSE LargeCap, S&P BSE MidCap and S&P BSESmallCap indices. As per the World Bank’s global economic outlook, the global economy remains in an uncertain state amid the prolonged effects of the overlappingnegative shocks of the pandemic, Russia’s war on Ukraine and the sharp tightening of monetary policy to contain high inflation. After growing at 3.1% in2022, the global economy is set to slow down to 2.1% in 2023 and expects a slight recovery to 2.4% growth in 2024. Tight global financial conditionsand subdued external demand are expected to weigh on growth across emerging market and developing economies. For advanced economies, the growth forecasted for the real GDP is 0.7% in CY23 and is anticipated to reach 1.2% by CY24. However, for developingeconomies, a 4.0% growth is expected in CY23 before slightly slowing down to 3.9% in CY24. The median headline global inflation stood at 7.2% yearon year in April 2023, down from a peak of 9.4% in July 2022. This slowdown largely reflects favorable effects from commodity prices falling belowtheir 2022 peaks, along with supply chain pressures easing. Umakanta Panigrahi Managing Director,Valuation Advisory Services As per the Asian Development Bank, given balancing developments, the growth forecasts for South Asia are at 5.5% in CY23 and 6.1% in CY24. Exportsfrom developing Asia weakened in the first quarter of 2023 as global demand slowed. However, consumption and investment are forecast to boostaggregate regional growth to 4.8% in 2023, as earlier forecast, with the projection for 2024 revised down only marginally to 4.7%. As per media reports, Reserve Bank of India has revised its forecasts for India’s economic growth to 6.5% from the 6.0% that they predicted previouslyfor FY23–24. This is attributable to outperforming in the first quarter. The Purchasing Managers’ Index for manufacturing and services and credit growthremained robust in recent months, which provides confidence about India’s growth prospects. The World Bank expects growth in India to slow down to6.3% in FY23–24. This is a revision of 0.3 percentage point downward from the previous estimates of 6.6%. The FTSE fell by 1.3% between the first quarter (Q1) CY23 to Q2 CY23, whereas DAX and EURO STOXX 50 rose by 3.3% and 1.9%, respectively, duringthe same period. Further, the S&P 500 and MSCI World Index rose by 8.3% and 4.6%, respectively, between Q1 CY23 and Q2 CY23. The Indian StockIndices (i.e., BSE Sensex and National Stock Exchange [NSE] Nifty 50) rose by 9.7% and 10.5%, respectively, from March 2023 through June 2023, whichwas an all-time high for both indices for CY23. Foreword – Continued Energy:We observed that the market capitalization of companies in the energy industry considered in our analysis has increased by 15.2% from Q1CY23 to Q2 CY23. India has achieved significant progress in renewable energy installed capacity and although the country’s current energy consumptionper capita is only one-third of the global average, the energy demand is projected to grow substantially owing to further industrialization andurbanization, which will primarily drive the energy demand by 2030. As per media reports, the provisional government data showed that Indian refiners'crude oil processing stayed near record peaks in March, catering to solid seasonal demand in the world's third-biggest oil consumer. Refinery throughputgained 3% to 5.44 million barrels per day (bpd) (23 million tons) year on year for March 2023. Throughput stood at 5.46 million bpd (20.85 million tons)in February 2023. Natural gas output was up by 2.4% to 2.96 billion cubic meters year on year, while crude oil production fell by 2.9% to 2.45 milliontons, the data showed. Preliminary sales data showed Indian state refiners posted an 8.4% rise in sales of gas and oil to 3.45 million tons in the first halfof April 2023 compared to the same period last month, indicating higher demand from the agriculture sector and a recovery in industrial activity. Indiahas been stocking up on discounted Russian crude oil. Western nations have imposed a price cap of USD 60 a barrel for anyone buying Russian oil aspart of sanctions against Moscow. However, India and China have paid prices above the cap, according to traders and Reuters calculations. Health Care Facilities:We observed that the market capitalization of companies in the health care facilities industry considered in our analysis hasincreased by 22.3% from Q1 CY23 to Q2 CY23. As per media reports, due to the surge in occupancy and average revenue per occupied bed, it is likelythat there will be a steady growth of revenue. The outlook remains stable for hospital chains owing to higher inpatient and surgery coun