Since HSIL Limited (NSE:HSIL) released its earnings in March 2018, analyst consensus outlook seem pessimistic, as a -9.6% fall in profits is expected in the upcoming year against the past 5-year average growth rate of 6.5%. Currently with a railing-twelve-month profit of ₹741m, the consensus growth rate suggests that earnings will drop to ₹670m by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for HSIL
Exciting times ahead?
The view from 2 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for HSIL, 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 ₹741m and the final forecast of ₹2.0b by 2021, the annual rate of growth for HSIL’s earnings is 38%. This leads to an EPS of ₹28.18 in the final year of projections relative to the current EPS of ₹10.25. In 2021, HSIL’s profit margin will have expanded from 3.3% to 5.8%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For HSIL, I’ve put together three essential aspects you should look at:
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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 HSIL 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 HSIL 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 HSIL? 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.