Jyothy Labs Limited Just Missed Earnings - But Analysts Have Updated Their Models
The analysts might have been a bit too bullish on Jyothy Labs Limited (NSE:JYOTHYLAB), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with ₹7.7b revenue coming in 2.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of ₹1.30 missed the mark badly, arriving some 38% below what was expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Jyothy Labs after the latest results.
Taking into account the latest results, the consensus forecast from Jyothy Labs' twelve analysts is for revenues of ₹30.2b in 2027. This reflects a reasonable 2.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 8.6% to ₹7.07 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹31.4b and earnings per share (EPS) of ₹9.01 in 2027. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
View our latest analysis for Jyothy Labs
The consensus price target fell 13% to ₹234, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Jyothy Labs at ₹310 per share, while the most bearish prices it at ₹181. 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 Jyothy Labs shareholders.
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 pretty clear that there is an expectation that Jyothy Labs' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 7.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Jyothy Labs.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jyothy Labs. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Jyothy Labs' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Jyothy Labs. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Jyothy Labs 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 - Jyothy Labs has 1 warning sign we think you should be aware 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.