The third quarter results of Granules India Limited (NSE: GRANULES) were released last week, making it a good time to review her performance. This is a state-of-the-art result, with sales of 8.4 billion yen, 4.5% ahead of expectations and statutory earnings per share of 13.15 yen. , in line with analysts’ ratings. Profits are an important time for investors because they can follow a company’s performance, look at what analysts are forecasting for the next year, and see if there has been a change in sentiment towards the company. We put together the most recent statutory forecast to see if analysts have changed their earnings models as a result of these results.
See our latest review for Granules India
Based on the latest results, the consensus of the nine analysts at Granules India is forecasting a turnover of 37.7 billion euros in 2022, which would reflect a significant improvement of 24% in sales compared to the last 12 months. Earnings per share are expected to rise 18% to 24.13 yen. Prior to this report’s writing, analysts had modeled revenue of 37.6 billion yen and earnings per share (EPS) of 23.09 yen in 2022. So the consensus seems to have become a little more optimistic about the potential for Granules India benefits as a result of these results. .
The consensus price target remained unchanged at 442, implying that improving earnings prospects should not have a long-term impact on creating shareholder value. This is not the only conclusion we can draw from this data, however, as some investors also like to factor in the spread in estimates when evaluating analysts’ price targets. Granules India’s most bullish analyst has a price target of 550 yen per share, while the most pessimistic puts it at 327 yen. There are certainly different opinions on the stock, but the range of estimates is not wide enough to imply that the situation is unpredictable, in our opinion.
Another way to view these estimates is in the context of a larger picture, such as how the forecast compares to past performance and whether the forecast is more or less bullish relative to other companies in the industry. It is clear from the latest estimates that the growth rate of Granules India is expected to accelerate significantly, with a revenue growth forecast of 24% significantly faster than its historic growth of 18% per year over the past five years. . Compare that with other companies in the same industry, which are expected to increase their revenues by 11% next year. It seems obvious that while the growth outlook is brighter than in the recent past, analysts also expect Granules India to grow faster than the industry as a whole.
The bottom line
The biggest takeaway for us is the consensus rise in earnings per share, which suggests a clear improvement in sentiment around Granules India’s earnings potential next year. Fortunately, there have been no major changes to the revenue forecast as the business is still expected to grow faster than the industry as a whole. The consensus price target held steady at 442 as the latest estimates were not sufficient to impact their price targets.
That said, the company’s long-term profit trajectory is much bigger than next year. We have forecasts for Granules India up to 2023, and you can view them for free on our platform here.
However, be aware that Granules India shows 2 warning signs in our investment analysis , you must know…
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