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In March 2018, Atul Ltd (NSE:ATUL) announced its earnings update. Overall, analysts seem extremely confident, with profits predicted to ramp up by an impressive 51% next year, compared with the previous 5-year average growth rate of 13%. By 2019, we can expect Atul’s bottom line to reach ₹4.2b, a jump from the current trailing-twelve-month ₹2.8b. Below is a brief commentary around Atul’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Atul
What can we expect from Atul in the longer term?
The longer term expectations from the 2 analysts of ATUL is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of ₹2.8b and the final forecast of ₹5.5b by 2021, the annual rate of growth for ATUL’s earnings is 21%. EPS reaches ₹186.79 in the final year of forecast compared to the current ₹93.21 EPS today. Margins are currently sitting at 8.4%, which is expected to expand to 11% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Atul, I’ve put together three pertinent factors you should further research:
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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 Atul 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 Atul 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 Atul? 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.