Bank of India Limited’s (NSEI:BANKINDIA): Bank of India Limited provides various banking products and services. The ₹117.98B market-cap company announced a latest loss of -₹14.70B on 31 March 2017 for its most recent financial year result. The most pressing concern for investors is BANKINDIA’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for BANKINDIA’s growth and when analysts expect the company to become profitable.

See our latest analysis for Bank of India

According to the industry analysts covering BANKINDIA, breakeven is near. They anticipate the company to incur a final loss in 2018, before generating positive profits of ₹11.57B in 2019. So, BANKINDIA is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which BANKINDIA must grow year-on-year. It turns out an average annual growth rate of 69.79% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving BANKINDIA’s growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I would like to bring into light with BANKINDIA is its debt-to-equity ratio of 117.15%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in BANKINDIA’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on BANKINDIA, so if you are interested in understanding the company at a deeper level, take a look at BANKINDIA’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further research:

1. Historical Track Record: What has BANKINDIA’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bank of India’s board and the CEO’s back ground.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.