New Forecasts: Here's What Analysts Think The Future Holds For GAIL (India) Limited (NSE:GAIL)

GAIL (India) Limited (NSE:GAIL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

After this upgrade, GAIL (India)'s seven analysts are now forecasting revenues of ₹1.2t in 2023. This would be a sizeable 34% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to drop 17% to ₹23.00 in the same period. Previously, the analysts had been modelling revenues of ₹1.0t and earnings per share (EPS) of ₹22.11 in 2023. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for GAIL (India)

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹187, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GAIL (India) analyst has a price target of ₹245 per share, while the most pessimistic values it at ₹149. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting GAIL (India)'s growth to accelerate, with the forecast 34% annualised growth to the end of 2023 ranking favourably alongside historical growth of 6.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GAIL (India) is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at GAIL (India).

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple GAIL (India) analysts - going out to 2025, 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. 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.