What Should We Expect From Indraprastha Gas Limited's (NSE:IGL) Earnings In The Years Ahead?
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Indraprastha Gas Limited's (NSE:IGL) released its most recent earnings update in May 2019, which suggested that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 17%. Below, I've presented key growth figures on how market analysts view Indraprastha Gas's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Indraprastha Gas
Market analysts' prospects for the coming year seems optimistic, with earnings increasing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 25% compared to today’s earnings, and finally hitting ₹12b by 2022.
While it is helpful to understand the rate of growth each year relative to today’s level, it may be more valuable to evaluate the rate at which the earnings are growing every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Indraprastha Gas'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 11%. This means that, we can anticipate Indraprastha Gas will grow its earnings by 11% every year for the next few years.
Next Steps:
For Indraprastha Gas, there are three important aspects you should further research:
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 IGL 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 IGL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IGL? 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.
