Earnings Report: CESC Limited Missed Revenue Estimates By 5.8%

Investors in CESC Limited (NSE:CESC) had a good week, as its shares rose 2.2% to close at ₹92.55 following the release of its quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹31b, statutory earnings were in line with expectations, at ₹10.04 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CESC after the latest results.

View our latest analysis for CESC

Following the latest results, CESC's twelve analysts are now forecasting revenues of ₹133.6b in 2023. This would be a satisfactory 6.9% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to step up 15% to ₹11.81. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹133.6b and earnings per share (EPS) of ₹11.86 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of ₹106, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values CESC at ₹120 per share, while the most bearish prices it at ₹89.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 5.5% growth on an annualised basis. That is in line with its 6.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.3% per year. So although CESC is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that CESC's revenues are expected to perform worse than the wider industry. The consensus price target held steady at ₹106, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on CESC. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CESC analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for CESC (1 is concerning!) that you need to be mindful of.

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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.