Analysts Have Just Cut Their Kewal Kiran Clothing Limited (NSE:KKCL) Revenue Estimates By 12%

The analysts covering Kewal Kiran Clothing Limited (NSE:KKCL) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Kewal Kiran Clothing's two analysts is for revenues of ₹3.1b in 2021, which would reflect a perceptible 5.5% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing ₹3.5b of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Kewal Kiran Clothing, given the measurable cut to revenue estimates.

View our latest analysis for Kewal Kiran Clothing

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 5.5% revenue decline a notable change from historical growth of 0.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% next year. It's pretty clear that Kewal Kiran Clothing's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Kewal Kiran Clothing this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Kewal Kiran Clothing going forwards.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Kewal Kiran Clothing that suggests the company could be somewhat overvalued. Learn why, and examine the assumptions that underpin our valuation by visiting our free platform here to learn more about our valuation approach.

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