How Do Analysts See HeidelbergCement India Limited (BOM:500292) Performing In The Years Ahead?

The most recent earnings announcement HeidelbergCement India Limited’s (BOM:500292) released in March 2018 signalled that the company benefited from a large tailwind, leading to a high double-digit earnings growth of 74.75%. Below is a brief commentary on my key takeaways on how market analysts view HeidelbergCement India’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for HeidelbergCement India

Analysts’ expectations for the upcoming year seems optimistic, with earnings expanding by a robust 37.43%. This growth seems to continue into the following year with rates arriving at double digit 67.81% compared to today’s earnings, and finally hitting ₹2.74b by 2021.

BSE:500292 Future Profit June 10th 18
BSE:500292 Future Profit June 10th 18

While it is helpful to understand the growth rate each year relative to today’s value, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of HeidelbergCement India’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 22.42%. This means, we can presume HeidelbergCement India will grow its earnings by 22.42% every year for the next couple of years.

Next Steps:

For HeidelbergCement India, I’ve compiled three relevant factors you should further examine:

  1. 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.
  2. Valuation: What is 500292 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 500292 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 500292? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!