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Based on JK Cement Limited’s (NSE:JKCEMENT) earnings update in March 2018, analyst consensus outlook appear conservative, with earnings growth rate expected to be 8.1% next year, which is within range of the past five-year average earnings growth of 8.9%. By 2019, we can expect J.K. Cement’s bottom line to reach ₹3.1b, a jump from the current trailing-twelve-month ₹2.9b. Below is a brief commentary around J.K. Cement’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for J.K. Cement
Exciting times ahead?
Longer term expectations from the 9 analysts covering JKCEMENT’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of JKCEMENT’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.
By 2021, JKCEMENT’s earnings should reach ₹5.6b, from current levels of ₹2.9b, resulting in an annual growth rate of 21%. This leads to an EPS of ₹79.75 in the final year of projections relative to the current EPS of ₹41.41. Earnings growth appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 5.9%, which is expected to expand to 7.3% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For J.K. Cement, I’ve compiled three fundamental 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 J.K. Cement 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 J.K. Cement 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 J.K. Cement? 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.