NHPC Limited Just Recorded A 16% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for NHPC Limited (NSE:NHPC) shareholders, because the company has just released its latest annual results, and the shares gained 7.4% to ₹35.45. Revenues disappointed slightly, as sales of ₹92b were 4.6% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of ₹3.51 coming in 16% above what was anticipated. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 NHPC

Taking into account the latest results, the current consensus from NHPC's four analysts is for revenues of ₹102.0b in 2023, which would reflect a solid 11% increase on its sales over the past 12 months. Per-share earnings are expected to rise 2.6% to ₹3.60. In the lead-up to this report, the analysts had been modelling revenues of ₹102.2b and earnings per share (EPS) of ₹3.70 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹38.58, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on NHPC, with the most bullish analyst valuing it at ₹46.06 and the most bearish at ₹32.95 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NHPC's past performance and to peers in the same industry. The analysts are definitely expecting NHPC's growth to accelerate, with the forecast 11% annualised growth to the end of 2023 ranking favourably alongside historical growth of 2.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that NHPC is expected to grow at about the same rate as 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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹38.58, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for NHPC going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - NHPC has 3 warning signs we think 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.