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Cera Sanitaryware Limited's (NSE:CERA) latest earnings update in May 2019 suggested that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 12%. Below, I've presented key growth figures on how market analysts perceive Cera Sanitaryware's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Cera Sanitaryware
Analysts' expectations for the coming year seems positive, with earnings increasing by a robust 18%. This growth seems to continue into the following year with rates arriving at double digit 41% compared to today’s earnings, and finally hitting ₹1.8b by 2022.
Although it is helpful to be aware of the rate of growth year by year relative to today’s level, it may be more beneficial estimating the rate at which the company is growing on average every year. The benefit of this technique is that we can get a better picture of the direction of Cera Sanitaryware's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 16%. This means that, we can expect Cera Sanitaryware will grow its earnings by 16% every year for the next couple of years.
Next Steps:
For Cera Sanitaryware, I've compiled three essential aspects you should look at:
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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 CERA 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 CERA 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 CERA? 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.