Earnings Miss: Kalyan Jewellers India Limited Missed EPS By 11% And Analysts Are Revising Their Forecasts

As you might know, Kalyan Jewellers India Limited (NSE:KALYANKJIL) last week released its latest full-year, and things did not turn out so great for shareholders. Kalyan Jewellers India missed earnings this time around, with ₹108b revenue coming in 2.4% below what the analysts had modelled. Statutory earnings per share (EPS) of ₹2.18 also fell short of expectations by 11%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Kalyan Jewellers India

Taking into account the latest results, the consensus forecast from Kalyan Jewellers India's four analysts is for revenues of ₹125.1b in 2023, which would reflect a notable 16% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 61% to ₹3.50. Before this earnings report, the analysts had been forecasting revenues of ₹126.1b and earnings per share (EPS) of ₹3.97 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹97.75, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Kalyan Jewellers India at ₹104 per share, while the most bearish prices it at ₹89.13. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting Kalyan Jewellers India's growth to accelerate, with the forecast 16% annualised growth to the end of 2023 ranking favourably alongside historical growth of 3.0% per annum over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. Kalyan Jewellers India 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 concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kalyan Jewellers India. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at ₹97.75, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Kalyan Jewellers India analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Kalyan Jewellers India is showing 1 warning sign in our investment analysis , you should know about...

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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.