What Should We Expect From TVS Motor Company Limited’s (BOM:532343) Earnings In The Next Couple Of Years?

The latest earnings release TVS Motor Company Limited’s (BOM:532343) announced in March 2018 confirmed that the business gained from a robust tailwind, leading to a double-digit earnings growth of 27.60%. Below, I’ve laid out key growth figures on how market analysts predict TVS Motor’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for TVS Motor

Analysts’ outlook for the upcoming year seems buoyant, with earnings rising by a robust 38.53%. This growth seems to continue into the following year with rates reaching double digit 78.88% compared to today’s earnings, and finally hitting ₹11.24b by 2021.

BSE:532343 Future Profit June 11th 18
BSE:532343 Future Profit June 11th 18

Even though it is informative understanding the growth rate year by year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are growing every year, on average. The advantage of this approach is that we can get a bigger picture of the direction of TVS Motor’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 23.01%. This means that, we can anticipate TVS Motor will grow its earnings by 23.01% every year for the next couple of years.

Next Steps:

For TVS Motor, there are three pertinent aspects you should further research:

  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 532343 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 532343 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 532343? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!