Earnings Miss: GAIL (India) Limited Missed EPS By 15% And Analysts Are Revising Their Forecasts
It's been a good week for GAIL (India) Limited (NSE:GAIL) shareholders, because the company has just released its latest yearly results, and the shares gained 5.3% to ₹169. It was not a great result overall. Although revenues beat expectations, hitting ₹1.4t, statutory earnings missed analyst forecasts by 15%, coming in at just ₹11.53 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from GAIL (India)'s 23 analysts is for revenues of ₹1.49t in 2027. This reflects a reasonable 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 12% to ₹12.92. In the lead-up to this report, the analysts had been modelling revenues of ₹1.41t and earnings per share (EPS) of ₹15.79 in 2027. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
View our latest analysis for GAIL (India)
There's been no major changes to the price target of ₹184, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GAIL (India) analyst has a price target of ₹210 per share, while the most pessimistic values it at ₹147. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GAIL (India)'s past performance and to peers in the same industry. It's pretty clear that there is an expectation that GAIL (India)'s revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.2% annually. Factoring in the forecast slowdown in growth, it's pretty clear that GAIL (India) is still expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for GAIL (India). On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. The consensus price target held steady at ₹184, 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 GAIL (India) going out to 2029, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with GAIL (India) .
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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.