How Do Analysts See L&T Finance Holdings Limited (NSE:L&TFH) Performing In The Next 12 Months?

Since L&T Finance Holdings Limited (NSEI:L&TFH) released its earnings in March 2018, the consensus outlook from analysts appear fairly confident, as a 34.82% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 13.69%. With net income at current levels of ₹14.59B, we should see this rise to ₹19.68B in 2019. Below is a brief commentary on the longer term outlook the market has for L&T Finance Holdings. Investors wanting to learn more about other aspects of the company should research its fundamentals here. See our latest analysis for L&T Finance Holdings

Exciting times ahead?

The view from 11 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of L&TFH'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.

From the current net income level of ₹14.59B and the final forecast of ₹28.97B by 2021, the annual rate of growth for L&TFH’s earnings is 23.12%. This leads to an EPS of ₹14.99 in the final year of projections relative to the current EPS of ₹7.49. The primary reason for earnings growth is due to a high top-line growth of 32.59% falling down into the bottom line. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 44.54% to 35.07% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For L&T Finance Holdings, there are three relevant factors 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 L&T Finance Holdings 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 L&T Finance Holdings is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of L&T Finance Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.