Earnings Miss: Nilkamal Limited Missed EPS By 11% And Analysts Are Revising Their Forecasts

The yearly results for Nilkamal Limited (NSE:NILKAMAL) were released last week, making it a good time to revisit its performance. It was not a great result overall. Although revenues beat expectations, hitting ₹27b, statutory earnings missed analyst forecasts by 11%, coming in at just ₹55.86 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Nilkamal

Taking into account the latest results, the current consensus from Nilkamal's twin analysts is for revenues of ₹30.7b in 2023, which would reflect a decent 12% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 50% to ₹84.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹30.3b and earnings per share (EPS) of ₹103 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target fell 5.1% to ₹2,429, with the analysts clearly linking lower forecast earnings to the performance of the stock price.

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. It's clear from the latest estimates that Nilkamal's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 26% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Nilkamal is expected to grow slower than 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Nilkamal's future valuation.

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. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Even so, be aware that Nilkamal is showing 2 warning signs in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.