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Since Marico Limited (NSEI:MARICO) released its earnings in March 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 19.16% in the upcoming year compared with the past 5-year average growth rate of 15.09%. Currently with earnings of ₹8.14B, we can expect this to reach ₹9.71B by 2019. Below is a brief commentary on the longer term outlook the market has for Marico. For those interested in more of an analysis of the company, you can research its fundamentals here. View our latest analysis for Marico
How will Marico perform in the near future?
The view from 30 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for MARICO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of ₹8.14B and the final forecast of ₹12.17B by 2021, the annual rate of growth for MARICO’s earnings is 14.89%. EPS reaches ₹10.02 in the final year of forecast compared to the current ₹6.32 EPS today. The bottom-line growth seems to be caused by reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 12.88%, which is expected to expand to 13.28% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Marico, 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 Marico 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 Marico 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 Marico? 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 pass 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.