Analysts Expect Breakeven For Supreme Infrastructure India Limited (NSE:SUPREMEINF) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Supreme Infrastructure India Limited's (NSE:SUPREMEINF) future prospects. Supreme Infrastructure India Limited, together with its subsidiaries, engages in the engineering and construction of road, highway, building, bridge, irrigation, power, and sewerage projects in India. The ₹389m market-cap company posted a loss in its most recent financial year of ₹8.1b and a latest trailing-twelve-month loss of ₹8.7b leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Supreme Infrastructure India will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Supreme Infrastructure India

Expectations from some of the Indian Construction analysts is that Supreme Infrastructure India is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of ₹8.8b in 2022. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 93% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Supreme Infrastructure India given that this is a high-level summary, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Supreme Infrastructure India is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on Supreme Infrastructure India, so if you are interested in understanding the company at a deeper level, take a look at Supreme Infrastructure India's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Valuation: What is Supreme Infrastructure India worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Supreme Infrastructure India is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Supreme Infrastructure India’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

If you decide to trade Supreme Infrastructure India, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.