Results: KEI Industries Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
Shareholders of KEI Industries Limited (NSE:KEI) will be pleased this week, given that the stock price is up 15% to ₹5,577 following its latest quarterly results. It looks like a credible result overall - although revenues of ₹32b were in line with what the analysts predicted, KEI Industries surprised by delivering a statutory profit of ₹28.66 per share, a notable 17% above expectations. 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 the latest results, KEI Industries' 14 analysts are now forecasting revenues of ₹144.5b in 2027. This would be a solid 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 17% to ₹121. In the lead-up to this report, the analysts had been modelling revenues of ₹144.2b and earnings per share (EPS) of ₹112 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for KEI Industries
The consensus price target rose 6.2% to ₹5,672, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values KEI Industries at ₹6,751 per share, while the most bearish prices it at ₹4,575. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await KEI Industries shareholders.
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 KEI Industries' rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 18% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that KEI Industries is expected to grow much faster than its industry.
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 KEI Industries following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple KEI Industries 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.