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Looking at V-Guard Industries Limited’s (NSE:VGUARD) earnings update in March 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 46% in the upcoming year against the past 5-year average growth rate of 21%. By 2019, we can expect V-Guard Industries’s bottom line to reach ₹2.0b, a jump from the current trailing-twelve-month ₹1.3b. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for V-Guard Industries
Can we expect V-Guard Industries to keep growing?
The 16 analysts covering VGUARD view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of VGUARD’s earnings growth over these next few years.
By 2021, VGUARD’s earnings should reach ₹2.9b, from current levels of ₹1.3b, resulting in an annual growth rate of 26%. This leads to an EPS of ₹6.91 in the final year of projections relative to the current EPS of ₹3.16. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 5.8%, which is expected to expand to 8.3% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For V-Guard Industries, there are three pertinent 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 V-Guard Industries 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 V-Guard Industries 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 V-Guard Industries? 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.