Analysts Just Made A Captivating Upgrade To Their Kewal Kiran Clothing Limited (NSE:KKCL) Forecasts

Shareholders in Kewal Kiran Clothing Limited (NSE:KKCL) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After this upgrade, Kewal Kiran Clothing's dual analysts are now forecasting revenues of ₹5.9b in 2022. This would be a notable 8.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 10% to ₹11.70. Previously, the analysts had been modelling revenues of ₹5.4b and earnings per share (EPS) of ₹8.78 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Kewal Kiran Clothing

Despite these upgrades, the analysts have not made any major changes to their price target of ₹297, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Kewal Kiran Clothing analyst has a price target of ₹325 per share, while the most pessimistic values it at ₹270. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kewal Kiran Clothing is an easy business to forecast or the underlying assumptions are obvious.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kewal Kiran Clothing's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Kewal Kiran Clothing is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.3% annualised growth until the end of 2022. If achieved, this would be a much better result than the 3.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 17% per year. So although Kewal Kiran Clothing's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Kewal Kiran Clothing.

Better yet, our automated discounted cash flow calculation (DCF) suggests Kewal Kiran Clothing could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.