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

After PNB Housing Finance Limited’s (NSEI:PNBHOUSING) earnings announcement in March 2018, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 27.04% in the upcoming year, though this is relatively lower than the past 5-year average earnings growth of 40.33%. Presently, with earnings at ₹8.29B, we should see this growing to ₹10.54B by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for PNB Housing Finance in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here. View our latest analysis for PNB Housing Finance

How is PNB Housing Finance going to perform in the near future?

Longer term expectations from the 10 analysts covering PNBHOUSING’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for PNBHOUSING, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
NSEI:PNBHOUSING Future Profit May 9th 18
NSEI:PNBHOUSING Future Profit May 9th 18
This results in an annual growth rate of 25.97% based on the most recent earnings level of ₹8.29B to the final forecast of ₹19.42B by 2021. EPS reaches ₹105.45 in the final year of forecast compared to the current ₹49.82 EPS today. Growth in earnings appears to be a result of top-line expansion of 27.29%, dropping down to the bottome-line. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 46.40% to 43.90% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For PNB Housing Finance, I’ve put together 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 PNB Housing Finance 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 PNB Housing Finance is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PNB Housing Finance? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!