Shree Cement Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Explore Shree Cement's Fair Values from the Community and select yours

Shree Cement Limited (NSE:SHREECEM) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.5% to hit ₹53b. Shree Cement also reported a statutory profit of ₹178, which was an impressive 59% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Shree Cement's 29 analysts is for revenues of ₹202.4b in 2026. This reflects a credible 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 27% to ₹525. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹216.3b and earnings per share (EPS) of ₹536 in 2026. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

View our latest analysis for Shree Cement

The analysts made no major changes to their price target of ₹30,771, suggesting the downgrades are not expected to have a long-term impact on Shree Cement's 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. The most optimistic Shree Cement analyst has a price target of ₹38,433 per share, while the most pessimistic values it at ₹20,250. 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 Shree Cement shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Shree Cement's revenue growth is expected to slow, with the forecast 5.5% annualised growth rate until the end of 2026 being well below the historical 10% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.7% per year. So it's clear that despite the slowdown in growth, Shree Cement 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. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better 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.

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. We have estimates - from multiple Shree Cement analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Shree Cement that you need to take into consideration.

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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.