Earnings Report: JK Tyre & Industries Limited Missed Revenue Estimates By 7.3%

Last week, you might have seen that JK Tyre & Industries Limited (NSE:JKTYRE) released its quarterly result to the market. The early response was not positive, with shares down 9.6% to ₹403 in the past week. Revenues came in 7.3% below expectations, at ₹36b. Statutory earnings per share were relatively better off, with a per-share profit of ₹29.74 being roughly in line with analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for JK Tyre & Industries

Following the latest results, JK Tyre & Industries' six analysts are now forecasting revenues of ₹157.5b in 2025. This would be an okay 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 11% to ₹36.08. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹161.9b and earnings per share (EPS) of ₹38.70 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹527 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values JK Tyre & Industries at ₹700 per share, while the most bearish prices it at ₹415. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that JK Tyre & Industries' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.5% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than JK Tyre & Industries.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹527, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for JK Tyre & Industries going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for JK Tyre & Industries you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com