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In July 2019, Equitas Holdings Limited (NSE:EQUITAS) announced its latest earnings update, which indicated that the business experienced a major tailwind, more than doubling its earnings from the prior year. Investors may find it useful to understand how market analysts view Equitas Holdings's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. 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 Equitas Holdings

Analysts' expectations for this coming year seems optimistic, with earnings climbing by a significant 84%. This strong growth in earnings is expected to continue, bringing the bottom line up to ₹6.1b by 2022.

While it’s informative knowing the rate of growth year by year relative to today’s figure, it may be more beneficial to gauge the rate at which the company is moving every year, on average. The benefit of this approach is that we can get a better picture of the direction of Equitas Holdings'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've appended 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 31%. This means, we can expect Equitas Holdings will grow its earnings by 31% every year for the next few years.

Next Steps:

For Equitas Holdings, I've compiled three pertinent factors you should further research:

1. 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.

2. Valuation: What is EQUITAS 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 EQUITAS is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EQUITAS? 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.