Results: JSW Steel Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

JSW Steel Limited (NSE:JSWSTEEL) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat forecasts, with revenue of ₹460b, some 2.1% above estimates, and statutory earnings per share (EPS) coming in at ₹8.75, 75% ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, JSW Steel's 31 analysts are now forecasting revenues of ₹2.08t in 2027. This would be a notable 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 107% to ₹63.29. In the lead-up to this report, the analysts had been modelling revenues of ₹2.10t and earnings per share (EPS) of ₹64.71 in 2027. 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.

View our latest analysis for JSW Steel

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,209, 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 JSW Steel, with the most bullish analyst valuing it at ₹1,401 and the most bearish at ₹851 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await JSW Steel shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 12% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 12% per year. It's clear that while JSW Steel's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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 revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹1,209, 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. At Simply Wall St, we have a full range of analyst estimates for JSW Steel going out to 2028, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for JSW Steel that you need to take into consideration.

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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.