In March 2018, General Insurance Corporation of India (NSE:GICRE) announced its most recent earnings update, which signalled that the company experienced a slight tailwind, eventuating to a single-digit earnings growth of 0.2%. Below is my commentary, albeit very simple and high-level, on how market analysts view General Insurance of India’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the upcoming year seems optimistic, with earnings expanding by a robust 18.5%. This growth seems to continue into the following year with rates arriving at double digit 30.3% compared to today’s earnings, and finally hitting ₹45.63b by 2021.
Although it’s informative knowing the rate of growth year by year relative to today’s figure, it may be more insightful to gauge the rate at which the company is growing on average every year. The pro of this technique is that we can get a bigger picture of the direction of General Insurance of India’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 put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11.7%. This means that, we can presume General Insurance of India will grow its earnings by 11.7% every year for the next couple of years.
For General Insurance of India, I’ve put together three fundamental 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 GICRE’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 GICRE? 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.