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The latest earnings announcement from Muthoot Finance Limited (NSE: MUTHOOTFIN) in March 2018 revealed that the company was enjoying a favorable wind, generating double-digit earnings growth of 49%. Below is a brief commentary on how I think market analysts predict Muthoot Finance's earnings growth trajectory over the next two years and whether the future is even brighter than the past. . I will review earnings excluding exceptional items to exclude one-time activities to better understand the underlying factors of earnings.

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Analysts' forecasts for the coming year seem rather moderate, with earnings rising only 7.3%. The growth outlook for the next year looks much more favorable, with rates reaching 22% to 10% compared to today's earnings, eventually reaching 25 billion rubles by 2022.

NSEI: MUTHOOTFIN Future Profit February 11 19

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While it is helpful to understand year-over-year growth relative to today's level, it may be more useful to estimate the rate at which the company moves each year, on average. The advantage of this approach is that it removes the impact of short-term interest rate fluctuations and explains the overall direction of Muthoot Finance's earnings trajectory over time, which may be more relevant for investors in the near future. long term. To calculate this rate, I inserted a line of best fit by consensus of analysts on the expected profits. The slope of this line corresponds to the profit growth rate, which in this case is 12%. This means that we can assume that Muthoot Finance will increase its profits by 12% each year over the next few years.

Next steps:

For Muthoot Finance, I put in place three relevant factors to consider:

  1. Financial health: Does he have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple controls on key factors such as leverage and risk.
  2. Evaluation: What is MUTHOOTFIN worth today? Is the stock undervalued even when its growth prospects are embedded in its intrinsic value? The intrinsic infographic value of our free research report makes it possible to visualize whether MUTHOOTFIN is currently poorly evaluated by the market.
  3. Other high growth alternatives: Are there any other high-growth stocks you could hold in MUTHOOTFIN's place? Explore our interactive list of stocks with high growth potential to get an idea of ​​what you may miss!

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Note that our analysis does not take into account the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.

"data-reactid =" 50 "> To help readers understand the short-term volatility of the financial market, we aim to provide you with a long-term research analysis based only on fundamental data. account of the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.