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Based on Mahanagar Gas Limited's (NSE:MGL) earnings update on 31 March 2019, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 9.1% next year against the higher past 5-year average growth rate of 14%. Currently with trailing-twelve-month earnings of ₹5.5b, we can expect this to reach ₹6.0b by 2020. Below is a brief commentary around Mahanagar Gas's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Mahanagar Gas
Exciting times ahead?
Longer term expectations from the 20 analysts covering MGL’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of MGL's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, MGL's earnings should reach ₹6.8b, from current levels of ₹5.5b, resulting in an annual growth rate of 6.0%. EPS reaches ₹69.78 in the final year of forecast compared to the current ₹55.31 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 20% to 19% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Mahanagar Gas, I've compiled three key factors you should further research:
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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 Mahanagar Gas 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 Mahanagar Gas 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 Mahanagar Gas? 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.