Earnings Beat: The Ramco Cements Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Investors in The Ramco Cements Limited (NSE:RAMCOCEM) had a good week, as its shares rose 6.5% to close at ₹828 following the release of its first-quarter results. Revenues of ₹21b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of ₹1.63 an impressive 36% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Ramco Cements

After the latest results, the 24 analysts covering Ramco Cements are now predicting revenues of ₹96.9b in 2025. If met, this would reflect a satisfactory 5.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 36% to ₹18.57. Before this earnings report, the analysts had been forecasting revenues of ₹99.7b and earnings per share (EPS) of ₹19.28 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of ₹887, suggesting the downgrades are not expected to have a long-term impact on Ramco Cements' valuation. 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 Ramco Cements at ₹2,176 per share, while the most bearish prices it at ₹580. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ramco Cements' past performance and to peers in the same industry. We would highlight that Ramco Cements' revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 6.4% annually. So it's clear that despite the slowdown in growth, Ramco Cements is still expected to grow meaningfully faster 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Ramco Cements. 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 Ramco Cements going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Ramco Cements (1 is a bit unpleasant!) that we have uncovered.

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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.

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