Kajaria Ceramics Limited (NSE:KAJARIACER) just released its quarterly report and things are looking bullish. The company beat forecasts, with revenue of ₹13b, some 2.6% above estimates, and statutory earnings per share (EPS) coming in at ₹10.63, 21% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kajaria Ceramics after the latest results.
Taking into account the latest results, the most recent consensus for Kajaria Ceramics from 28 analysts is for revenues of ₹56.0b in 2027. If met, it would imply a notable 11% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 15% to ₹39.54. Before this earnings report, the analysts had been forecasting revenues of ₹54.2b and earnings per share (EPS) of ₹36.79 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Check out our latest analysis for Kajaria Ceramics
Despite these upgrades,the analysts have not made any major changes to their price target of ₹1,349, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kajaria Ceramics analyst has a price target of ₹1,703 per share, while the most pessimistic values it at ₹1,002. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's clear from the latest estimates that Kajaria Ceramics' rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 6.8% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. Kajaria Ceramics is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kajaria Ceramics following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Kajaria Ceramics will grow in line with the overall 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 Kajaria Ceramics analysts - going out to 2029, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Kajaria Ceramics that you need to be mindful of.
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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.