Analysts Have Lowered Expectations For Vijaya Diagnostic Centre Limited (NSE:VIJAYA) After Its Latest Results

Vijaya Diagnostic Centre Limited (NSE:VIJAYA) shareholders are probably feeling a little disappointed, since its shares fell 6.2% to ₹363 in the week after its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of ₹4.6b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.0% to hit ₹10.69 per share. The analysts 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Vijaya Diagnostic Centre

Taking into account the latest results, Vijaya Diagnostic Centre's four analysts currently expect revenues in 2023 to be ₹4.62b, approximately in line with the last 12 months. Statutory earnings per share are expected to fall 10% to ₹9.65 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹5.11b and earnings per share (EPS) of ₹11.78 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 11% to ₹593, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Vijaya Diagnostic Centre, with the most bullish analyst valuing it at ₹699 and the most bearish at ₹465 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 0.2% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 15% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vijaya Diagnostic Centre is expected to lag the wider 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Vijaya Diagnostic Centre going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Vijaya Diagnostic Centre (1 is a bit unpleasant) 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.