Rainbows and Unicorns: NOCIL Limited (NSE:NOCIL) Analysts Just Became A Lot More Optimistic

NOCIL Limited (NSE:NOCIL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 9.6% to ₹287 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from NOCIL's two analysts is for revenues of ₹13b in 2022 which - if met - would reflect a meaningful 13% increase on its sales over the past 12 months. Per-share earnings are expected to soar 42% to ₹10.60. Previously, the analysts had been modelling revenues of ₹12b and earnings per share (EPS) of ₹8.25 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for NOCIL

It will come as no surprise to learn that the analysts have increased their price target for NOCIL 30% to ₹320 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values NOCIL at ₹393 per share, while the most bearish prices it at ₹239. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await NOCIL shareholders.

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. We would highlight that NOCIL's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2022 being well below the historical 61% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% annually. So it's pretty clear that, while NOCIL's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue forecasts, although the latest estimates suggest that NOCIL will grow in line with the overall market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at NOCIL.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for NOCIL going out as far as 2024, and you can see them free on our platform here.

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. 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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