Results: NBCC (India) Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

As you might know, NBCC (India) Limited (NSE:NBCC) recently reported its third-quarter numbers. It looks to have been a bit of a mixed result. While revenues of ₹19b fell 15% short of what analysts had predicted, statutory earnings per share (EPS) of ₹2.08 exceeded expectations by 8.1%. 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. We’ve gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

See our latest analysis for NBCC (India)

NSEI:NBCC Past and Future Earnings, February 17th 2020
NSEI:NBCC Past and Future Earnings, February 17th 2020

Taking into account the latest results, the most recent consensus for NBCC (India) from two analysts is for revenues of ₹112.6b in 2021, which is a major 32% increase on its sales over the past 12 months. Statutory earnings per share are expected to jump 200% to ₹2.30. Before this earnings report, analysts had been forecasting revenues of ₹125.6b and earnings per share (EPS) of ₹2.65 in 2021. It looks like analyst sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to consensus earnings per share numbers as well.

Analysts made no major changes to their price target of ₹36.00, suggesting the downgrades are not expected to have a long-term impact on NBCC (India)’s valuation.

It can also be useful to step back and take a broader view of how analyst forecasts compare to NBCC (India)’s performance in recent years. Analysts are definitely expecting NBCC (India)’s growth to accelerate, with the forecast 32% growth ranking favourably alongside historical growth of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that NBCC (India) is expected to grow much faster than its market.

The Bottom Line

The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NBCC (India). Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that NBCC (India)’s revenues are expected to grow faster than the wider market. The consensus price target held steady at ₹36.00, with the latest estimates not enough to have an impact on analysts’ estimated valuations.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for NBCC (India) going out as far as 2022, and you can see them free on our platform here.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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