In March 2018, General Insurance Corporation of India (NSE:GICRE) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 18% in the upcoming year compared with the past 5-year average growth rate of 7.4%. With trailing-twelve-month net income at current levels of ₹31.5b, we should see this rise to ₹37.3b in 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 4 analysts covering GICRE is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for GICRE, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 12% based on the most recent earnings level of ₹31.5b to the final forecast of ₹45.6b by 2021. EPS reaches ₹25.41 in the final year of forecast compared to the current ₹18.13 EPS today. Earnings growth appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 7.2%, which is expected to expand to 8.2% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For General Insurance of India, there are three pertinent factors you should further research:
- 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.
- Future Earnings: How does General Insurance of India’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of General Insurance of India? 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 email@example.com.