Will Jyothy Laboratories Limited’s (BOM:532926) Earnings Grow In The Next 12 Months?

In March 2018, Jyothy Laboratories Limited (BOM:532926) announced its latest earnings update. Overall, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 11.06% in the upcoming year against the higher past 5-year average growth rate of 23.30%. With net income at current levels of ₹1.86b, we should see this rise to ₹2.07b in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Jyothy Laboratories in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here. See our latest analysis for Jyothy Laboratories

What can we expect from Jyothy Laboratories in the longer term?

The longer term expectations from the 10 analysts of 532926 is tilted towards the 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 532926’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.
BSE:532926 Future Profit June 9th 18
BSE:532926 Future Profit June 9th 18
This results in an annual growth rate of 15.57% based on the most recent earnings level of ₹1.86b to the final forecast of ₹2.94b by 2021. EPS reaches ₹16.2 in the final year of forecast compared to the current ₹9.84 EPS today. Growth in the bottom line seems to suggest reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 10.66%, which is expected to expand to 11.48% by 2021.

Next Steps:

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