Just In: One Analyst Has Become A Lot More Bullish On GHCL Limited's (NSE:GHCL) Earnings

Shareholders in GHCL Limited (NSE:GHCL) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

Following the upgrade, the current consensus from GHCL's solitary analyst is for revenues of ₹47b in 2023 which - if met - would reflect a modest 6.0% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to fall 15% to ₹77.20 in the same period. Prior to this update, the analyst had been forecasting revenues of ₹41b and earnings per share (EPS) of ₹69.60 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for GHCL

Despite these upgrades, the analyst has not made any major changes to their price target of ₹723, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of GHCL'shistorical trends, as the 6.0% annualised revenue growth to the end of 2023 is roughly in line with the 5.9% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although GHCL is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower 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 GHCL.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on GHCL that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.