What Should Investors Know About PNB Housing Finance Limited’s (NSE:PNBHOUSING) Future?

PNB Housing Finance Limited’s (NSEI:PNBHOUSING) latest earnings announcement in March 2018 showed that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 58.37%. Below, I’ve laid out key numbers on how market analysts view PNB Housing Finance’s earnings growth trajectory over the next few 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 PNB Housing Finance

Market analysts’ consensus outlook for next year seems positive, with earnings rising by a robust 32.11%. This growth seems to continue into the following year with rates reaching double digit 74.67% compared to today’s earnings, and finally hitting ₹19.41B by 2021.

NSEI:PNBHOUSING Future Profit May 17th 18
NSEI:PNBHOUSING Future Profit May 17th 18

Even though it’s helpful to be aware of the rate of growth year by year relative to today’s level, it may be more insightful determining the rate at which the earnings are rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of PNB Housing Finance’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 25.03%. This means that, we can assume PNB Housing Finance will grow its earnings by 25.03% every year for the next few years.

Next Steps:

For PNB Housing Finance, I’ve compiled three essential factors you should look at:

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