Dewan Housing Finance Corporation Limited (NSE:DHFL): Poised For Long-Term Success?
Dewan Housing Finance Corporation Limited’s (NSE:DHFL) latest earnings announcement in March 2018 indicated that the company experienced a immense headwind with earnings declining by -58%. Below, I’ve laid out key growth figures on how market analysts view Dewan Housing Finance’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Dewan Housing Finance
Market analysts’ prospects for this coming year seems positive, with earnings climbing by a robust 34%. This growth seems to continue into the following year with rates arriving at double digit 64% compared to today’s earnings, and finally hitting ₹21.8b by 2021.
While it is informative understanding the growth rate each year relative to today’s level, it may be more beneficial analyzing the rate at which the company is rising or falling every year, on average. The pro of this approach is that we can get a better picture of the direction of Dewan Housing Finance’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 21%. This means, we can assume Dewan Housing Finance will grow its earnings by 21% every year for the next couple of years.
Next Steps:
For Dewan Housing Finance, I’ve put together three essential factors you should look at:
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.
Valuation: What is DHFL 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 DHFL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DHFL? 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.
