The latest earnings update Kalpataru Power Transmission Limited (NSE:KALPATPOWR) released in March 2018 showed that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 51%. Below, I’ve laid out key numbers on how market analysts perceive Kalpataru Power Transmission’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Kalpataru Power Transmission
Market analysts’ prospects for next year seems positive, with earnings expanding by a robust 39%. This growth seems to continue into the following year with rates reaching double digit 59% compared to today’s earnings, and finally hitting ₹5.4b by 2021.
Although it is informative understanding the rate of growth year by year relative to today’s level, it may be more insightful to analyze the rate at which the company is growing every year, on average. The benefit of this method is that we can get a bigger picture of the direction of Kalpataru Power Transmission’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 20%. This means that, we can presume Kalpataru Power Transmission will grow its earnings by 20% every year for the next couple of years.
Next Steps:
For Kalpataru Power Transmission, I’ve put together three essential factors you should further research:
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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 KALPATPOWR 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 KALPATPOWR 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 KALPATPOWR? 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.