Will Redington (India) Limited's (NSE:REDINGTON) Earnings Grow In The Year Ahead?
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On 31 March 2019, Redington (India) Limited (NSE:REDINGTON) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 9.7% next year relative to the past 5-year average growth rate of 7.2%. Presently, with latest-twelve-month earnings at ₹5.1b, we should see this growing to ₹5.6b by 2020. Below is a brief commentary on the longer term outlook the market has for Redington (India). Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Redington (India)
What can we expect from Redington (India) in the longer term?
Over the next three years, it seems the consensus view of the 8 analysts covering REDINGTON is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of REDINGTON's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 9.3% based on the most recent earnings level of ₹5.1b to the final forecast of ₹6.0b by 2022. This leads to an EPS of ₹15.5 in the final year of projections relative to the current EPS of ₹12.8. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 1.1% to 1.0% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Redington (India), I've compiled three important aspects you should further examine:
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 Redington (India) 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 Redington (India) is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Redington (India)? 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.
