Garware Technical Fibres Limited Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next

Garware Technical Fibres Limited (NSE:GARFIBRES) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasts. Garware Technical Fibres missed earnings this time around, with ₹3.1b revenue coming in 3.8% below what the analyst had modelled. Statutory earnings per share (EPS) of ₹18.46 also fell short of expectations by 18%. The analyst 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

See our latest analysis for Garware Technical Fibres

Taking into account the latest results, the current consensus from Garware Technical Fibres' single analyst is for revenues of ₹14.0b in 2023, which would reflect a notable 20% increase on its sales over the past 12 months. Per-share earnings are expected to jump 44% to ₹115. Yet prior to the latest earnings, the analyst had been anticipated revenues of ₹13.8b and earnings per share (EPS) of ₹120 in 2023. The analyst seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹4,050, with the analyst clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analyst is definitely expecting Garware Technical Fibres' growth to accelerate, with the forecast 16% annualised growth to the end of 2023 ranking favourably alongside historical growth of 5.4% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Garware Technical Fibres is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

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. We have analyst estimates for Garware Technical Fibres going out as far as 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Garware Technical Fibres has 1 warning sign we think you should be aware of.

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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.