In This Article:
Transport Corporation of India Limited’s (NSE:TCI) announced its latest earnings update in March 2018, which suggested that the company benefited from a strong tailwind, leading to a high double-digit earnings growth of 53%. Below, I’ve laid out key growth figures on how market analysts predict Transport of India’s earnings growth outlook over the next couple of 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.
Check out our latest analysis for Transport of India
Market analysts’ prospects for the coming year seems positive, with earnings climbing by a robust 19%. This growth seems to continue into the following year with rates reaching double digit 44% compared to today’s earnings, and finally hitting ₹1.8b by 2021.
While it’s useful to be aware of the rate of growth each year relative to today’s value, it may be more insightful to analyze the rate at which the business is growing every year, on average. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Transport of India’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 15%. This means, we can anticipate Transport of India will grow its earnings by 15% every year for the next few years.
Next Steps:
For Transport of India, there are three essential aspects 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 TCI 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 TCI 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 TCI? 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.