Analyst Estimates: Here's What Brokers Think Of The India Cements Limited (NSE:INDIACEM) After Its Yearly Report

A week ago, The India Cements Limited (NSE:INDIACEM) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. Results overall were credible, with revenues arriving 5.1% better than analyst forecasts at ₹56b. Higher revenues also resulted in lower statutory losses, which were ₹4.04 per share, some 5.1% smaller than the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for India Cements

After the latest results, the five analysts covering India Cements are now predicting revenues of ₹59.2b in 2024. If met, this would reflect a reasonable 4.9% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching ₹0.15 per share. Before this earnings report, the analysts had been forecasting revenues of ₹59.3b and earnings per share (EPS) of ₹3.35 in 2024. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

The consensus price target held steady at ₹152, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic India Cements analyst has a price target of ₹190 per share, while the most pessimistic values it at ₹112. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that India Cements is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.9% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. Although India Cements' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest low-light for us was that the forecasts for India Cements dropped from profits to a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that India Cements' revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for India Cements going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for India Cements (of which 1 is concerning!) you should know about.

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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.