The latest earnings release Zydus Wellness Limited's (NSE:ZYDUSWELL) announced in July 2019 revealed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 26%. Below, I've laid out key numbers on how market analysts view Zydus Wellness'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.
Market analysts' prospects for next year seems buoyant, with earnings climbing by a robust 29%. This growth seems to continue into the following year with rates reaching double digit 66% compared to today’s earnings, and finally hitting ₹4.4b by 2022.
Even though it’s useful to be aware of the rate of growth year by year relative to today’s figure, it may be more beneficial to analyze the rate at which the business is rising or falling on average every year. The benefit of this method is that we can get a better picture of the direction of Zydus Wellness'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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 28%. This means that, we can presume Zydus Wellness will grow its earnings by 28% every year for the next couple of years.
For Zydus Wellness, I've compiled three relevant 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 ZYDUSWELL 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 ZYDUSWELL is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ZYDUSWELL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.