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The latest earnings update Gujarat State Petronet Limited (NSE:GSPL) released in May 2019 confirmed that the business benefited from a strong tailwind, eventuating to a double-digit earnings growth of 35%. Below, I've laid out key growth figures on how market analysts perceive Gujarat State Petronet's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Gujarat State Petronet
Analysts' outlook for the upcoming year seems pessimistic, with earnings falling by a double-digit -23%. In the next couple of years, earnings are expected to continue to be below today's level, with a decline of -17% in 2021, eventually reaching ₹8.3b in 2022.
While it’s useful to be aware of the growth rate each year relative to today’s value, it may be more beneficial determining the rate at which the earnings are growing every year, on average. The advantage of this method is that we can get a better picture of the direction of Gujarat State Petronet's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -9.5%. This means that, we can presume Gujarat State Petronet will chip away at a rate of -9.5% every year for the next few years.
Next Steps:
For Gujarat State Petronet, I've put together three fundamental factors you should further examine:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is GSPL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GSPL is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GSPL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.