Ahluwalia Contracts (India) Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Ahluwalia Contracts (India) Limited (NSE:AHLUCONT) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of ₹20b, some 9.9% above estimates, and statutory earnings per share (EPS) coming in at ₹11.52, 40% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Ahluwalia Contracts (India)

After the latest results, the dual analysts covering Ahluwalia Contracts (India) are now predicting revenues of ₹22.8b in 2022. If met, this would reflect a solid 15% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 85% to ₹21.35. Before this earnings report, the analysts had been forecasting revenues of ₹21.0b and earnings per share (EPS) of ₹18.85 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Ahluwalia Contracts (India) 12% to ₹404on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Ahluwalia Contracts (India)'s growth to accelerate, with the forecast 15% annualised growth to the end of 2022 ranking favourably alongside historical growth of 6.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ahluwalia Contracts (India) is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ahluwalia Contracts (India) following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Ahluwalia Contracts (India) , and understanding this should be part of your investment process.

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