Stove Kraft Limited Just Missed Revenue By 8.4%: Here's What Analysts Think Will Happen Next

It's been a good week for Stove Kraft Limited (NSE:STOVEKRAFT) shareholders, because the company has just released its latest interim results, and the shares gained 5.0% to ₹464. Results look mixed - while revenue fell marginally short of analyst estimates at ₹6.8b, statutory earnings were in line with expectations, at ₹10.86 per share. 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.

Check out our latest analysis for Stove Kraft

Taking into account the latest results, the current consensus from Stove Kraft's lone analyst is for revenues of ₹13.5b in 2024. This would reflect a modest 2.3% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 28% to ₹9.90. In the lead-up to this report, the analyst had been modelling revenues of ₹14.4b and earnings per share (EPS) of ₹18.20 in 2024. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the ₹598 price target, showing that the analyst doesn't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Stove Kraft's revenue growth is expected to slow, with the forecast 4.7% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Stove Kraft.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stove Kraft. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Stove Kraft you should be aware of, and 1 of them doesn't sit too well with us.

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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.