Module II· Multiples & Sector SpecificsBasic
Question
Which multiples are standard for industrial companies / machinery?
Answer
Standard for industrials
- EV/EBITDA: the primary multiple, mid-cap typically 7–10x
- EV/EBIT: for capital-intensive businesses (where D&A matters)
- P/E: a cross-check, typically 12–18x
- EV/Revenue: secondary, where margin dispersion is low
Sector differentiation
- Auto suppliers: 5–7x
- Specialty machinery: 8–12x
- Engineered components: 7–9x
Pitch tip
For cyclical industrials (steel, commodity chemicals) use mid-cycle multiples, not spot. A senior MD will ask about the point in the cycle.