Gujarat Gas Limited (NSE:GUJGASLTD) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

Gujarat Gas Limited (NSE:GUJGASLTD) shareholders are probably feeling a little disappointed, since its shares fell 5.4% to ₹622 in the week after its latest quarterly results. It was a workmanlike result, with revenues of ₹45b coming in 2.2% ahead of expectations, and statutory earnings per share of ₹16.61, in line with analyst appraisals. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Gujarat Gas

Taking into account the latest results, the consensus forecast from Gujarat Gas' 17 analysts is for revenues of ₹172.3b in 2025. This reflects an okay 5.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 15% to ₹20.95. Before this earnings report, the analysts had been forecasting revenues of ₹171.5b and earnings per share (EPS) of ₹19.82 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at ₹535, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Gujarat Gas analyst has a price target of ₹755 per share, while the most pessimistic values it at ₹350. 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.

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. It's pretty clear that there is an expectation that Gujarat Gas' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 15% 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 revenue shrink 2.8% 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 most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Gujarat Gas following these results. On the plus side, they made no changes to their revenue estimates - and they expect it to perform 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 estimates - from multiple Gujarat Gas analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Gujarat Gas 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.