Carborundum Universal Limited (NSE:CARBORUNIV): What Are The Future Prospects?

As Carborundum Universal Limited (NSE:CARBORUNIV) announced its earnings release on 31 March 2019, analyst consensus outlook seem in-line with its track record, as upcoming earnings growth is expected to be 18% next year, similar to the range of average earnings growth for the past five years of 20% per year. By 2020, we can expect Carborundum Universal’s bottom line to reach ₹2.9b, a jump from the current trailing-twelve-month of ₹2.5b. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Carborundum Universal in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for Carborundum Universal

Exciting times ahead?

Over the next three years, it seems the consensus view of the 7 analysts covering CARBORUNIV is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CARBORUNIV’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NSEI:CARBORUNIV Past and Future Earnings, August 1st 2019
NSEI:CARBORUNIV Past and Future Earnings, August 1st 2019

This results in an annual growth rate of 15% based on the most recent earnings level of ₹2.5b to the final forecast of ₹3.9b by 2022. EPS reaches ₹20.59 in the final year of forecast compared to the current ₹13.1 EPS today. In 2022, CARBORUNIV’s profit margin will have expanded from 9.2% to 10%.

Next Steps:

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.