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The most recent earnings announcement Bata India Limited's (NSE:BATAINDIA) released in May 2019 revealed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 49%. Today I want to provide a brief commentary on how market analysts predict Bata India'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.
View our latest analysis for Bata India
Analysts' expectations for the upcoming year seems positive, with earnings expanding by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 32% compared to today’s earnings, and finally hitting ₹4.9b by 2022.
Although it’s helpful to be aware of the growth year by year relative to today’s value, it may be more beneficial to determine the rate at which the business is rising or falling on average every year. The benefit of this method is that we can get a better picture of the direction of Bata India's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. 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 13%. This means that, we can presume Bata India will grow its earnings by 13% every year for the next couple of years.
Next Steps:
For Bata India, I've put together three fundamental aspects 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 BATAINDIA 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 BATAINDIA 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 BATAINDIA? 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.