Stove Kraft Limited Just Beat Revenue Estimates By 16%

The quarterly results for Stove Kraft Limited (NSE:STOVEKRAFT) were released last week, making it a good time to revisit its performance. Stove Kraft beat revenue forecasts by a solid 16% to hit ₹4.8b. Statutory earnings per share came in at ₹12.69, in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Stove Kraft's four analysts is for revenues of ₹19.1b in 2027. This reflects a satisfactory 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 19% to ₹20.27. Before this earnings report, the analysts had been forecasting revenues of ₹19.1b and earnings per share (EPS) of ₹20.27 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Stove Kraft

The consensus price target rose 13% to ₹815despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Stove Kraft's earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Stove Kraft, with the most bullish analyst valuing it at ₹1,000 and the most bearish at ₹595 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 Stove Kraft's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Stove Kraft's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 8.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. Factoring in the forecast slowdown in growth, it seems obvious that Stove Kraft is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Stove Kraft's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Stove Kraft going out to 2029, and you can see them free on our platform here.

You can also see whether Stove Kraft is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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