Earnings Miss: Gujarat Energy Limited Missed EPS By 12% And Analysts Are Revising Their Forecasts
As you might know, Gujarat Energy Limited (NSE:GUJENERGY) last week released its latest quarterly, and things did not turn out so great for shareholders. Gujarat Energy missed earnings this time around, with ₹96b revenue coming in 3.9% below what the analysts had modelled. Statutory earnings per share (EPS) of ₹5.32 also fell short of expectations by 12%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the seven analysts covering Gujarat Energy are now predicting revenues of ₹394.1b in 2027. If met, this would reflect a huge 27% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 2.6% to ₹27.39. In the lead-up to this report, the analysts had been modelling revenues of ₹370.0b and earnings per share (EPS) of ₹27.03 in 2027. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.
Check out our latest analysis for Gujarat Energy
It may not be a surprise to see thatthe analysts have reconfirmed their price target of ₹343, implying that the uplift in revenue is not expected to greatly contribute to Gujarat Energy's valuation in the near term. 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 Gujarat Energy, with the most bullish analyst valuing it at ₹600 and the most bearish at ₹231 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Gujarat Energy's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 9.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gujarat Energy to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Gujarat Energy analysts - going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Gujarat Energy has 1 warning sign we think you should be aware of.
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