What Should We Expect From Sun Pharmaceutical Industries Limited’s (NSE:SUNPHARMA) Earnings In The Next Couple Of Years?

Sun Pharmaceutical Industries Limited’s (NSEI:SUNPHARMA) released its most recent earnings update in March 2018, which showed that the business faced a immense headwind with earnings declining by -68.96%. Investors may find it useful to understand how market analysts perceive Sun Pharmaceutical Industries’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Sun Pharmaceutical Industries

Market analysts’ consensus outlook for this coming year seems positive, with earnings climbing by a significant 97.41%. This strong growth in earnings is expected to continue, bringing the bottom line up to ₹64.40B by 2021.

NSEI:SUNPHARMA Future Profit Jun 6th 18
NSEI:SUNPHARMA Future Profit Jun 6th 18

Although it’s helpful to understand the rate of growth year by year relative to today’s value, it may be more beneficial to gauge the rate at which the business is rising or falling every year, on average. The benefit of this technique is that we can get a better picture of the direction of Sun Pharmaceutical Industries’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 inserted 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 36.19%. This means, we can expect Sun Pharmaceutical Industries will grow its earnings by 36.19% every year for the next couple of years.

Next Steps:

For Sun Pharmaceutical Industries, there are three relevant factors you should look at:

  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 SUNPHARMA 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 SUNPHARMA is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SUNPHARMA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!