NHPC Limited (NSE:NHPC) Analysts Just Trimmed Their Revenue Forecasts By 7.0%

Today is shaping up negative for NHPC Limited (NSE:NHPC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the five analysts covering NHPC are now predicting revenues of ₹110b in 2024. If met, this would reflect a modest 2.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 3.3% to ₹4.00. Prior to this update, the analysts had been forecasting revenues of ₹118b and earnings per share (EPS) of ₹4.06 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest consensus updates even though there was no change to its EPS estimates.

Check out our latest analysis for NHPC

The average price target was steady at ₹53.51 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

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 NHPC's growth to accelerate, with the forecast 3.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.7% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, NHPC is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on NHPC after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple NHPC analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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