What Should Investors Know About Capacit’e Infraprojects Limited’s (NSE:CAPACITE) Earnings Trend?

In March 2018, Capacit’e Infraprojects Limited (NSE:CAPACITE) released its most recent earnings announcement, which confirmed that the company experienced a robust tailwind, eventuating to a double-digit earnings growth of 15%. Below is my commentary, albeit very simple and high-level, on how market analysts view Capacit’e Infraprojects’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Capacit’e Infraprojects

Analysts’ expectations for the coming year seems buoyant, with earnings expanding by a robust 31%. This growth seems to continue into the following year with rates arriving at double digit 61% compared to today’s earnings, and finally hitting ₹1.8b by 2021.

NSEI:CAPACITE Future Profit November 7th 18
NSEI:CAPACITE Future Profit November 7th 18

While it’s informative understanding the growth each year relative to today’s level, it may be more beneficial estimating the rate at which the company is rising or falling on average every year. The advantage of this method is that we can get a bigger picture of the direction of Capacit’e Infraprojects’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 24%. This means, we can presume Capacit’e Infraprojects will grow its earnings by 24% every year for the next couple of years.

Next Steps:

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

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.