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In March 2019, ICICI Prudential Life Insurance Company Limited (NSE:ICICIPRULI) announced its most recent earnings update, which suggested that the business faced a immense headwind with earnings falling by -40%. Below, I've presented key growth figures on how market analysts view ICICI Prudential Life Insurance's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for ICICI Prudential Life Insurance
Analysts' outlook for next year seems optimistic, with earnings climbing by a robust 33%. This growth seems to continue into the following year with rates arriving at double digit 50% compared to today’s earnings, and finally hitting ₹19b by 2022.
Even though it’s informative knowing the growth rate year by year relative to today’s value, it may be more beneficial to determine the rate at which the business is growing on average every year. The benefit of this technique is that we can get a better picture of the direction of ICICI Prudential Life Insurance'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 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 17%. This means that, we can anticipate ICICI Prudential Life Insurance will grow its earnings by 17% every year for the next couple of years.
Next Steps:
For ICICI Prudential Life Insurance, I've put together three important factors 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 ICICIPRULI 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 ICICIPRULI 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 ICICIPRULI? 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.