JK Lakshmi Cement Limited Just Beat EPS By 59%: Here's What Analysts Think Will Happen Next

As you might know, JK Lakshmi Cement Limited (NSE:JKLAKSHMI) just kicked off its latest quarterly results with some very strong numbers. JK Lakshmi Cement delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting ₹11b, some 13% above indicated. Statutory EPS were ₹7.61, an impressive 59% ahead of forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for JK Lakshmi Cement

Taking into account the latest results, the consensus forecast from JK Lakshmi Cement's five analysts is for revenues of ₹43.7b in 2021, which would reflect an okay 5.6% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to rise 3.1% to ₹21.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹42.9b and earnings per share (EPS) of ₹19.90 in 2021. So the consensus seems to have become somewhat more optimistic on JK Lakshmi Cement's earnings potential following these results.

The consensus price target was unchanged at ₹353, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values JK Lakshmi Cement at ₹483 per share, while the most bearish prices it at ₹240. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. For example, we noticed that JK Lakshmi Cement's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 5.6%, well above its historical decline of 6.2% a year over the past year. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 12% next year. Although JK Lakshmi Cement's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards JK Lakshmi Cement following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that JK Lakshmi Cement's 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.

With that in mind, we wouldn't be too quick to come to a conclusion on JK Lakshmi Cement. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for JK Lakshmi Cement going out to 2023, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for JK Lakshmi Cement you should be aware of, and 1 of them shouldn't be ignored.

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This article by Simply Wall St is general in nature. 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.
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