Need To Know: Analysts Just Made A Substantial Cut To Their Sharda Cropchem Limited (NSE:SHARDACROP) Estimates

Market forces rained on the parade of Sharda Cropchem Limited (NSE:SHARDACROP) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Sharda Cropchem's seven analysts is for revenues of ₹38b in 2024 which - if met - would reflect a reasonable 3.4% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to sink 14% to ₹18.16 in the same period. Previously, the analysts had been modelling revenues of ₹43b and earnings per share (EPS) of ₹26.00 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sharda Cropchem's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Sharda Cropchem

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to ₹501.

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. It's pretty clear that there is an expectation that Sharda Cropchem's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.9% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sharda Cropchem is also expected to grow slower than other industry participants.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Sharda Cropchem. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sharda Cropchem's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Sharda Cropchem analysts - going out to 2026, 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 downgrading 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. 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.