Kaveri Seed Company Limited's (NSE:KSCL) Analyst Just Slashed This Year's Estimates

Today is shaping up negative for Kaveri Seed Company Limited (NSE:KSCL) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the downgrade, the latest consensus from Kaveri Seed's solo analyst is for revenues of ₹13b in 2027, which would reflect a reasonable 4.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to accumulate 3.7% to ₹50.30. Previously, the analyst had been modelling revenues of ₹16b and earnings per share (EPS) of ₹71.20 in 2027. Indeed, we can see that the analyst is a lot more bearish about Kaveri Seed's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Kaveri Seed

The consensus price target fell 8.8% to ₹986, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Kaveri Seed's revenue growth is expected to slow, with the forecast 5.8% annualised growth rate until the end of 2027 being well below the historical 7.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Kaveri Seed.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Kaveri Seed's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Kaveri Seed.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Kaveri Seed going out as far as 2028, and you can see them free on our platform here.

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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.