Analysts Remain Very Optimistic on India
Watch the video with Andrew Stotz or read Watching the Street: India below.
Consensus Recommendations: India
In the bottom-up country consensus recommendations in the chart below, India hasn’t been a “Buy” in Asia for the past five years. Recently, however, it has gotten stronger recommendations and moved to “Neutral” from “Sell.”
Learn more: How to Benefit from Our Watching the Street Charts
Muthoot Finance is one of the companies with the most positive recommendations. It provides loans secured by gold jewelry, and the share price is up 100% year-to-date.
Bank of India is one of the companies with the most negative recommendations. The company has suffered due to low asset quality, which has pushed down the share price by about 65% since the start of 2015.
Consensus Earnings Estimates: India
Below we can see that the consensus EPS estimates, the red, versus the actual consensus estimates, the blue. Analysts have estimated EPS to grow 20% on average for the past five years, while earnings have fallen by 6% on average over that same time period.
So analysts remain very optimistic on India.
In fiscal year 2017, Tata Communications, one of the companies with the highest consensus EPS growth estimates, is expected to turn the loss that they experienced in the prior year into the highest EPS the company has seen since 2009.
Among companies with the lowest consensus EPS estimates, we can see that after a price increase in voice calls earlier this year, Idea Cellular lost market share, and analysts expect continued lower earnings.
Consensus Target Prices: India
The graph below shows the consensus target price expected return versus the actual return.
Indian analysts underestimated the return between 2012 and 2014, but that turned to overestimation in 2015. The actual year-to-date return is in line with the target price expected return in 2016.
Of the companies with the highest consensus target price expected return, Tata Elxsi, part of the Tata Group that receives nearly 90% of its revenue from software development, has the second strongest recommendation and an expected 46% upside.
One of the companies with the lowest consensus target price expected return is SAIL. It has the most negative recommendations and an expected downside of 29%.
Do YOU use any kind of analyst estimate when considering an investment?
Let us know in a comment below.
DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.