₹405 - That's What Analysts Think KFin Technologies Limited (NSE:KFINTECH) Is Worth After These Results

KFin Technologies Limited (NSE:KFINTECH) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were respectable, with statutory earnings of ₹2.51 per share roughly in line with what the analysts had forecast. Revenues of ₹1.9b came in 2.6% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for KFin Technologies

Following the latest results, KFin Technologies' three analysts are now forecasting revenues of ₹7.92b in 2024. This would be a modest 5.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.3% to ₹12.37. In the lead-up to this report, the analysts had been modelling revenues of ₹7.82b and earnings per share (EPS) of ₹12.88 in 2024. 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 minor downgrade to their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 27% to ₹405, suggesting that these impacts are not expected to weigh on the stock's value in the long term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on KFin Technologies, with the most bullish analyst valuing it at ₹450 and the most bearish at ₹335 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting KFin Technologies is an easy business to forecast or the the analysts are all using similar assumptions.

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. We would highlight that KFin Technologies' revenue growth is expected to slow, with the forecast 6.9% annualised growth rate until the end of 2024 being well below the historical 12% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than KFin Technologies.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for KFin Technologies. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for KFin Technologies going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.