Will Capital First Limited’s (NSE:CAPF) Earnings Grow Over The Next Few Years?

The most recent earnings update Capital First Limited’s (NSE:CAPF) released in March 2018 confirmed that the business experienced a strong tailwind, eventuating to a double-digit earnings growth of 36.78%. Below, I’ve presented key growth figures on how market analysts perceive Capital First’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View out our latest analysis for Capital First

Analysts’ outlook for next year seems buoyant, with earnings rising by a robust 31.22%. This growth seems to continue into the following year with rates reaching double digit 70.99% compared to today’s earnings, and finally hitting ₹7.82b by 2021.

NSEI:CAPF Future Profit July 11th 18
NSEI:CAPF Future Profit July 11th 18

Even though it’s informative knowing the growth rate each year relative to today’s level, it may be more valuable determining the rate at which the business is growing every year, on average. The benefit of this technique is that we can get a better picture of the direction of Capital First’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 appended 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 24.97%. This means that, we can presume Capital First will grow its earnings by 24.97% every year for the next couple of years.

Next Steps:

For Capital First, I’ve compiled three important 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 CAPF 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 CAPF is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CAPF? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!