GMR Infrastructure Limited’s (NSE:GMRINFRA) Shift From Loss To Profit

GMR Infrastructure Limited’s (NSE:GMRINFRA): GMR Infrastructure Limited provides engineering, procurement, and construction (EPC) solutions in India and internationally. The ₹93.88b market-cap company announced a latest loss of -₹10.83b on 31 March 2018 for its most recent financial year result. As path to profitability is the topic on GMRINFRA’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for GMRINFRA.

See our latest analysis for GMR Infrastructure

Expectation from Construction analysts is GMRINFRA is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of ₹0 in . So, GMRINFRA is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which GMRINFRA must grow year-on-year. It turns out an average annual growth rate of -7.40% is expected,

NSEI:GMRINFRA Past Future Earnings July 1st 18
NSEI:GMRINFRA Past Future Earnings July 1st 18

I’m not going to go through company-specific developments for GMRINFRA given that this is a high-level summary, however, keep in mind that typically a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before I wrap up, there’s one issue worth mentioning. GMRINFRA currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and GMRINFRA has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of GMRINFRA to cover in one brief article, but the key fundamentals for the company can all be found in one place – GMRINFRA’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:

  1. Historical Track Record: What has GMRINFRA’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on GMR Infrastructure’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.