GAIL (India) Limited Just Recorded A 46% EPS Beat: Here's What Analysts Are Forecasting Next
GAIL (India) Limited (NSE:GAIL) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Statutory earnings performance was extremely strong, with revenue of ₹471b beating expectations by 23% and earnings per share (EPS) of ₹7.18, an impressive 46%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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the 21 analysts covering GAIL (India) provided consensus estimates of ₹1.55t revenue in 2027, which would reflect a measurable 2.3% decline over the past 12 months. Statutory earnings per share are predicted to climb 10% to ₹21.18. In the lead-up to this report, the analysts had been modelling revenues of ₹1.60t and earnings per share (EPS) of ₹16.55 in 2027. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the massive increase in to the earnings per share numbers.
Check out our latest analysis for GAIL (India)
The consensus has made no major changes to the price target of ₹201, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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 GAIL (India) at ₹225 per share, while the most bearish prices it at ₹162. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 4.6% annualised decline to the end of 2027. That is a notable change from historical growth of 8.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - GAIL (India) is expected to lag the wider 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 GAIL (India) following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on GAIL (India). Long-term earnings power is much more important than next year's profits. We have estimates - from multiple GAIL (India) analysts - going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for GAIL (India) (1 is potentially serious) you should be aware of.
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