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This article aims to identify the relationship between the accuracy of firm value attained by using different number of comparable companies to carry out a relative valuation. A major question regarding relative valuation is the most optimal number of comparable firms to be used, this study aims to answer that question by looking at 14 sectors in the Indian economy. The study finds the enterprise value of each target company selected by using a range of comparable companies, from the closest comparable company to the top ten closest comparable and finds the enterprise value. The study then identifies the absolute error and presents its findings regarding the most optimal number of firms to be used to attain the most accurate enterprise value in a relative valuation process. The study also analyses the effect of the overall number of firms in the sector and if this has an effect on the error value attained by using the industry multiple for the valuation process, thus, answering the question of if a sector with many firms provides a more accurate enterprise value of the target that a sector with a smaller number of firms. This helps confirm the market effect on the valuation process.