In This Article:
The latest earnings update Indraprastha Gas Limited (NSE:IGL) released in March 2018 revealed that the business gained from a strong tailwind, eventuating to a double-digit earnings growth of 19.0%. Below, I’ve laid out key numbers on how market analysts predict Indraprastha Gas’s earnings growth trajectory over the next couple of 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 Indraprastha Gas
Analysts’ outlook for the coming year seems optimistic, with earnings rising by a robust 10.0%. This growth seems to continue into the following year with rates reaching double digit 27.0% compared to today’s earnings, and finally hitting ₹10.44b by 2021.
Although it’s useful to be aware of the growth rate year by year relative to today’s value, it may be more beneficial to estimate the rate at which the business is rising or falling every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Indraprastha Gas’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 inserted 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 11.6%. This means, we can assume Indraprastha Gas will grow its earnings by 11.6% every year for the next couple of years.
Next Steps:
For Indraprastha Gas, there are three fundamental aspects you should further research:
-
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.
-
Valuation: What is IGL 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 IGL is currently mispriced by the market.
-
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IGL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.