Revenue Beat: Shree Cement Limited Exceeded Revenue Forecasts By 10% And Analysts Are Updating Their Estimates
Shree Cement Limited (NSE:SHREECEM) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 10% higher than the analysts had forecast, at ₹62b, while EPS of ₹147 beat analyst models by 8.4%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, Shree Cement's 26 analysts are forecasting 2027 revenues to be ₹217.6b, approximately in line with the last 12 months. Per-share earnings are expected to expand 19% to ₹537. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹231.9b and earnings per share (EPS) of ₹565 in 2027. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Check out our latest analysis for Shree Cement
Despite the cuts to forecast earnings, there was no real change to the ₹27,962 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Shree Cement at ₹31,600 per share, while the most bearish prices it at ₹20,100. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2027. That is a notable change from historical growth of 7.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 3.2% annually for the foreseeable future. So it's pretty clear that Shree Cement's revenues are expected to shrink slower than the wider industry.
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. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 estimates - from multiple Shree Cement analysts - going out to 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.