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The Karur Vysya Bank Limited’s (NSE:KARURVYSYA) most recent earnings update in March 2018 revealed that the company faced a substantial headwind with earnings declining by -42.96%. Below is a brief commentary on my key takeaways on how market analysts perceive Karur Vysya Bank’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. View out our latest analysis for Karur Vysya Bank
Market analysts’ prospects for the upcoming year seems buoyant, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching ₹10.23b in 2021.
Even though it’s informative understanding the rate of growth year by year relative to today’s value, it may be more valuable estimating the rate at which the business is moving every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Karur Vysya Bank’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 37.54%. This means that, we can anticipate Karur Vysya Bank will grow its earnings by 37.54% every year for the next few years.
Next Steps:
For Karur Vysya Bank, I’ve compiled three relevant factors 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 KARURVYSYA 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 KARURVYSYA 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 KARURVYSYA? 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.