One GHCL Limited (NSE:GHCL) Analyst Is Reducing Their Forecasts For This Year

One thing we could say about the covering analyst on GHCL Limited (NSE:GHCL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the consensus from solo analyst covering GHCL is for revenues of ₹40b in 2024, implying an uneasy 8.9% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to plunge 34% to ₹83.90 in the same period. Previously, the analyst had been modelling revenues of ₹48b and earnings per share (EPS) of ₹95.20 in 2024. Indeed, we can see that the analyst is a lot more bearish about GHCL's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for GHCL

The average price target climbed 7.0% to ₹722 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.9% by the end of 2024. This indicates a significant reduction from annual growth of 22% 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 10% annually for the foreseeable future. It's pretty clear that GHCL's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that GHCL's revenues are expected to grow slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for GHCL going out as far as 2025, and you can see them free on our platform here.

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.