In This Article:
HDFC Bank Limited’s (NSEI:HDFCBANK) released its most recent earnings update in March 2018, which signalled that the business gained from a robust tailwind, leading to a double-digit earnings growth of 21.57%. Below, I’ve presented key growth figures on how market analysts predict HDFC Bank’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for HDFC Bank
Analysts’ expectations for the upcoming year seems positive, with earnings climbing by a robust 17.82%. This growth seems to continue into the following year with rates reaching double digit 44.07% compared to today’s earnings, and finally hitting ₹327.09B by 2021.
While it’s helpful to understand the rate of growth each year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that we can get a better picture of the direction of HDFC Bank’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 18.04%. This means, we can expect HDFC Bank will grow its earnings by 18.04% every year for the next few years.
Next Steps:
For HDFC Bank, I’ve put together three relevant aspects you should further examine:
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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 HDFCBANK 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 HDFCBANK 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 HDFCBANK? 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 pass 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.