Will PNB Housing Finance Limited’s (NSE:PNBHOUSING) Earnings Grow Over The Next Few Years?

PNB Housing Finance Limited’s (NSE:PNBHOUSING) most recent earnings update in March 2018 revealed that the company gained from a large tailwind, leading to a high double-digit earnings growth of 58.37%. Below, I’ve presented key growth figures on how market analysts view PNB Housing Finance’s earnings growth outlook 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. View out our latest analysis for PNB Housing Finance

Market analysts’ consensus outlook for the upcoming year seems positive, with earnings growing by a robust 35.83%. This growth seems to continue into the following year with rates reaching double digit 81.00% compared to today’s earnings, and finally hitting ₹21.80b by 2021.

NSEI:PNBHOUSING Future Profit July 16th 18
NSEI:PNBHOUSING Future Profit July 16th 18

While it is informative understanding the rate of growth each year relative to today’s figure, it may be more beneficial evaluating the rate at which the company is growing on average every year. The advantage of this approach 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’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 28.45%. This means, we can expect PNB Housing Finance will grow its earnings by 28.45% every year for the next couple of years.

Next Steps:

For PNB Housing Finance, I’ve compiled three fundamental 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 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!