Earnings Miss: Chalet Hotels Limited Missed EPS And Analysts Are Revising Their Forecasts

Chalet Hotels Limited (NSE:CHALET) shareholders are probably feeling a little disappointed, since its shares fell 3.8% to ₹834 in the week after its latest second-quarter results. The results don't look great, especially considering that the analysts had been forecasting a profit and Chalet Hotels delivered a statutory loss of ₹6.35 per share. Revenues of ₹3.8b did beat expectations by 2.1% though. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Chalet Hotels after the latest results.

View our latest analysis for Chalet Hotels

After the latest results, the 13 analysts covering Chalet Hotels are now predicting revenues of ₹17.5b in 2025. If met, this would reflect a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 383% to ₹16.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹17.8b and earnings per share (EPS) of ₹17.39 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at ₹950, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Chalet Hotels, with the most bullish analyst valuing it at ₹1,050 and the most bearish at ₹835 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chalet Hotels' past performance and to peers in the same industry. It's clear from the latest estimates that Chalet Hotels' rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Chalet Hotels is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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. We have estimates - from multiple Chalet Hotels analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Chalet Hotels 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.