As analysts expect Control Print Limited (BOM:522295) to report noticeable earnings growth of 26.49% in the coming 12 months, it’s necessary to take a moment and consider this strong vision. Those invested in the stock should contemplate the factors that are driving this growth, as the return realised by shareholders may look different in the future if underlying assumptions are not realised. To get a preliminary understanding, this article will interpret Control Print’s margin performance to help recognise the underlying make-up of revenue and expenses that is responsible for driving future earnings expectations and what it means for 522295’s returns relative to its competitors.Check out our latest analysis for Control Print
Understanding 522295’s earnings with profit margin
Attractive margins generally indicate a desirable ability to translate sales revenue in to earnings, and return for shareholders. By calculating 522295’s profit margin, we can take a closer look at this ability and use it to understand what is driving earnings growth.
Margin Calculation for 522295
Profit Margin = Net Income ÷ Revenue
∴ Profit Margin = ₹313.10m ÷ ₹1.74b = 18.00%
The past five years have seen Control Print’s margin expand, as a result of a 24.15% average growth in net income outstripping average revenue growth of 16.54%, which suggests that the company has been able to convert a larger percentage of revenue into net income whilst grow their top line at the same time. The current 18.00% margin seems to continue this movement, which suggests that the increase in net income has likely occurred from a combination of enhanced cost efficiency as well as top line growth.
Using Control Print’s margin expectations as a way to understand projections for the future
Margins are expected to keep on expanding, with 15.92% in expected annual revenue growth and annual net income growth forecasted at 20.36%. This suggests future earnings growth is driven further by enhanced cost efficiency alongside revenue increases, which is enlarging the incremental amount of net income that is retained from the forecasted revenue growth. Despite this, those watching the stock must know a expanding margin can mean different things for different companies, thus more detailed research is essential.
For 522295, there are three fundamental factors you should further research:
- 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.
- Valuation: What is 522295 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 522295 is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of 522295? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!