As you might know, UltraTech Cement Limited (NSE:ULTRACEMCO) last week released its latest quarterly, and things did not turn out so great for shareholders. It wasn’t a great result overall – while revenue fell marginally short of analyst estimates at ₹104b, statutory earnings missed forecasts by 13%, coming in at just ₹24.68 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from UltraTech Cement’s 25 analysts is for revenues of ₹494.1b in 2021, which would reflect a sizeable 25% increase on its sales over the past 12 months. Statutory earnings per share are expected to jump 27% to ₹169. In the lead-up to this report, analysts had been modelling revenues of ₹494.4b and earnings per share (EPS) of ₹169 in 2021. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
Analysts reconfirmed their price target of ₹4,880, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic UltraTech Cement analyst has a price target of ₹5,504 per share, while the most pessimistic values it at ₹3,350. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the UltraTech Cement’s past performance and to peers in the same market. Analysts are definitely expecting UltraTech Cement’s growth to accelerate, with the forecast 25% growth ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect UltraTech Cement to grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there’s been no major change in the business’ prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at ₹4,880, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have forecasts for UltraTech Cement going out to 2022, and you can see them free on our platform here.
You can also see whether UltraTech Cement is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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