KEI Industries Limited Beat Revenue Forecasts By 5.3%: Here's What Analysts Are Forecasting Next

It's been a mediocre week for KEI Industries Limited (NSE:KEI) shareholders, with the stock dropping 13% to ₹1,054 in the week since its latest annual results. Results overall were respectable, with statutory earnings of ₹41.56 per share roughly in line with what the analysts had forecast. Revenues of ₹57b came in 5.3% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for KEI Industries

Taking into account the latest results, the current consensus from KEI Industries' two analysts is for revenues of ₹67.1b in 2023, which would reflect a notable 17% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 25% to ₹52.20. Before this earnings report, the analysts had been forecasting revenues of ₹66.0b and earnings per share (EPS) of ₹54.90 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,315, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

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 clear from the latest estimates that KEI Industries' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 9.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that KEI Industries is expected to grow much faster than its industry.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at ₹1,315, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

We also provide an overview of the KEI Industries Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.