Earnings Report: JK Tyre & Industries Limited Missed Revenue Estimates By 6.9%

JK Tyre & Industries Limited (NSE:JKTYRE) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to ₹386 in the week after its latest second-quarter results. Revenues came in 6.9% 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JK Tyre & Industries after the latest results.

View our latest analysis for JK Tyre & Industries

Following the latest results, JK Tyre & Industries' six analysts are now forecasting revenues of ₹151.0b in 2025. This would be a modest 3.1% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ₹26.90, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ₹158.7b and earnings per share (EPS) of ₹36.08 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the ₹512 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on JK Tyre & Industries, with the most bullish analyst valuing it at ₹650 and the most bearish at ₹415 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 6.3% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that JK Tyre & Industries is also expected to grow slower than other industry participants.

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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. 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, and 1 of them makes us a bit uncomfortable.

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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.