Gujarat Gas Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Gujarat Gas Limited (NSE:GUJGASLTD), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with ₹39b revenue coming in 3.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of ₹3.21 missed the mark badly, arriving some 25% below what was expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Gujarat Gas

Taking into account the latest results, the most recent consensus for Gujarat Gas from 18 analysts is for revenues of ₹168.8b in 2025. If met, it would imply a decent 9.0% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 28% to ₹20.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹183.2b and earnings per share (EPS) of ₹21.68 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of ₹494, suggesting the downgrades are not expected to have a long-term impact on Gujarat Gas' 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 Gujarat Gas analyst has a price target of ₹676 per share, while the most pessimistic values it at ₹360. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that Gujarat Gas' revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2025 being well below the historical 17% 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 3.1% per year. So it's clear that despite the slowdown in growth, Gujarat Gas is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Gujarat Gas. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Gujarat Gas going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Gujarat Gas that you should be aware 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.