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In May 2019, Dilip Buildcon Limited (NSE:DBL) announced its most recent earnings update, which suggested that the company endured a slight headwind with earnings declining from ₹5.8b to ₹5.5b, a change of -4.4%. Below is a brief commentary on my key takeaways on how market analysts predict Dilip Buildcon's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Dilip Buildcon
Analysts' outlook for next year seems optimistic, with earnings growing by a robust 26%. This growth seems to continue into the following year with rates arriving at double digit 47% compared to today’s earnings, and finally hitting ₹10b by 2022.
Even though it’s useful to understand the rate of growth each year relative to today’s level, it may be more beneficial determining the rate at which the business is moving on average every year. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Dilip Buildcon's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 18%. This means that, we can expect Dilip Buildcon will grow its earnings by 18% every year for the next couple of years.
Next Steps:
For Dilip Buildcon, I've put together three key factors 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 DBL 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 DBL 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 DBL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.