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In March 2019, Redington (India) Limited (NSE:REDINGTON) announced its most recent earnings update, which suggested that the business benefited from a slight tailwind, leading to a single-digit earnings growth of 5.4%. Below, I’ve laid out key growth figures on how market analysts view Redington (India)’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Redington (India)

Analysts’ outlook for this coming year seems rather subdued, with earnings climbing by a single digit 9.0%. The growth outlook in the following year seems much more positive with rates reaching double digit 24% compared to today’s earnings and reduces to ₹6.0b by 2022.

NSEI:REDINGTON Past and Future Earnings, June 18th 2019
NSEI:REDINGTON Past and Future Earnings, June 18th 2019

While it’s informative knowing the growth rate each year relative to today’s level, it may be more insightful evaluating the rate at which the earnings are growing on average every year. The advantage of this approach is that we can get a better picture of the direction of Redington (India)’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute 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 9.2%. This means, we can anticipate Redington (India) will grow its earnings by 9.2% every year for the next couple of years.

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Next Steps:

For Redington (India), I’ve put together three pertinent factors you should further examine:

  1. 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.
  2. Valuation: What is REDINGTON 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 REDINGTON is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of REDINGTON? 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 editorial-team@simplywallst.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.

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