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The latest earnings update Bajaj Consumer Care Limited (NSE:BAJAJCON) released in March 2019 showed that the company benefited from a small tailwind, leading to a single-digit earnings growth of 5.0%. Below, I've presented key growth figures on how market analysts perceive Bajaj Consumer Care's earnings growth trajectory over the next couple of 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.
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Analysts' outlook for this coming year seems optimistic, with earnings expanding by a robust 13%. This growth seems to continue into the following year with rates arriving at double digit 27% compared to today’s earnings, and finally hitting ₹3.2b by 2022.
Even though it’s helpful to be aware of the growth year by year relative to today’s figure, it may be more valuable to analyze the rate at which the company is growing every year, on average. The pro of this technique is that we can get a bigger picture of the direction of Bajaj Consumer Care'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 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 11%. This means, we can anticipate Bajaj Consumer Care will grow its earnings by 11% every year for the next few years.
Next Steps:
For Bajaj Consumer Care, there are three pertinent aspects 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 BAJAJCON 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 BAJAJCON 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 BAJAJCON? 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.