Analysts Just Made A Meaningful Upgrade To Their Manappuram Finance Limited (NSE:MANAPPURAM) Forecasts

Manappuram Finance Limited (NSE:MANAPPURAM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 7.8% over the past week, closing at ₹151. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After the upgrade, the eleven analysts covering Manappuram Finance are now predicting revenues of ₹59b in 2024. If met, this would reflect a major 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 14% to ₹25.02. Previously, the analysts had been modelling revenues of ₹53b and earnings per share (EPS) of ₹22.18 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Manappuram Finance

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹168, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. It's clear from the latest estimates that Manappuram Finance's rate of growth is expected to accelerate meaningfully, with the forecast 49% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Manappuram Finance is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 Manappuram Finance.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential risk with Manappuram Finance, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other risk we've identified .

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.

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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.