Results: Grindwell Norton Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Grindwell Norton Limited (NSE:GRINDWELL) just released its quarterly report and things are looking bullish. Grindwell Norton beat earnings, with revenues hitting ₹4.6b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. This is an important time for investors, as they can track a company's performance in its report, look at what experts 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 the analysts are expecting for next year.

View our latest analysis for Grindwell Norton

After the latest results, the four analysts covering Grindwell Norton are now predicting revenues of ₹17.2b in 2022. If met, this would reflect a decent 15% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 9.0% to ₹19.70. In the lead-up to this report, the analysts had been modelling revenues of ₹17.1b and earnings per share (EPS) of ₹19.05 in 2022. So the consensus seems to have become somewhat more optimistic on Grindwell Norton's earnings potential following these results.

The consensus price target rose 13% to ₹626, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. The most optimistic Grindwell Norton analyst has a price target of ₹788 per share, while the most pessimistic values it at ₹570. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Grindwell Norton's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 6.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 15% per year. Grindwell Norton is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Grindwell Norton's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Grindwell Norton going out to 2025, and you can see them 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 Grindwell Norton , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. 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.
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