In This Article:
Bata India Limited’s (NSE:BATAINDIA) latest earnings announcement in March 2018 showed that the business gained from a robust tailwind, eventuating to a double-digit earnings growth of 38.7%. Today I want to provide a brief commentary on how market analysts view Bata India’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Bata India
Analysts’ outlook for next year seems positive, with earnings rising by a robust 27.5%. This growth seems to continue into the following year with rates reaching double digit 48.4% compared to today’s earnings, and finally hitting ₹3.79b by 2021.
Even though it’s informative knowing the growth year by year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Bata India’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 17.4%. This means that, we can assume Bata India will grow its earnings by 17.4% every year for the next few years.
Next Steps:
For Bata India, I’ve compiled three pertinent 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 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!
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.