Ambuja Cements Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Shareholders might have noticed that Ambuja Cements Limited (NSE:AMBUJACEM) filed its interim result this time last week. The early response was not positive, with shares down 2.1% to ₹360 in the past week. It was not a great result overall. While revenues of ₹187b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit ₹3.08 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Ambuja Cements' 39 analysts are now forecasting revenues of ₹429.2b in 2027. This would be a modest 7.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 12% to ₹10.14 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹431.8b and earnings per share (EPS) of ₹10.78 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Check out our latest analysis for Ambuja Cements
It might be a surprise to learn that the consensus price target fell 7.1% to ₹446, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Ambuja Cements at ₹617 per share, while the most bearish prices it at ₹346. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. The analysts are definitely expecting Ambuja Cements' growth to accelerate, with the forecast 16% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.1% annually. So it's clear with the acceleration in growth, Ambuja Cements is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that Ambuja Cements' revenue is expected to perform better than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Ambuja Cements 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 Ambuja Cements that you should be aware of.
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