What Can We Expect From Bajaj Auto Limited's (NSE:BAJAJ-AUTO) Earnings In The Year Ahead?
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Looking at Bajaj Auto Limited's (NSE:BAJAJ-AUTO) earnings update in March 2019, the consensus outlook from analysts appear pessimistic, as a 0.3% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 7.3%. With trailing-twelve-month net income at current levels of ₹49b, the consensus growth rate suggests that earnings will decline to ₹49b by 2020. Below is a brief commentary on the longer term outlook the market has for Bajaj Auto. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Bajaj Auto
What can we expect from Bajaj Auto in the longer term?
The 3 analysts covering BAJAJ-AUTO view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BAJAJ-AUTO's earnings growth over these next few years.
By 2022, BAJAJ-AUTO's earnings should reach ₹63b, from current levels of ₹49b, resulting in an annual growth rate of 6.7%. EPS reaches ₹217.58 in the final year of forecast compared to the current ₹170.3 EPS today. Margins are currently sitting at 15%, which is expected to expand to 17% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Bajaj Auto, I've put together three important aspects you should look at:
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 Bajaj Auto 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 Bajaj Auto is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bajaj Auto? 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.
