Revenue Miss: Deepak Fertilisers And Petrochemicals Corporation Limited Fell 9.1% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Feb 5, 2024

Deepak Fertilisers And Petrochemicals Corporation Limited (NSE:DEEPAKFERT) shareholders are probably feeling a little disappointed, since its shares fell 8.6% to ₹574 in the week after its latest third-quarter results. Results look mixed – while revenue fell marginally short of analyst estimates at ₹19b, statutory earnings were in line with expectations, at ₹97.70 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Deepak Fertilisers And Petrochemicals

NSEI:DEEPAKFERT Earnings and Revenue Growth February 5th 2024

Following last week’s earnings report, Deepak Fertilisers And Petrochemicals’ dual analysts are forecasting 2025 revenues to be ₹95.1b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 47% to ₹56.05. Before this earnings report, the analysts had been forecasting revenues of ₹96.6b and earnings per share (EPS) of ₹58.25 in 2025. 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.

The consensus price target held steady at ₹762, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It’s pretty clear that there is an expectation that Deepak Fertilisers And Petrochemicals’ revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Deepak Fertilisers And Petrochemicals is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹762, with the latest estimates not enough to have an impact on their price targets.

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 analyst estimates for Deepak Fertilisers And Petrochemicals going out as far as 2026, and you can see them free on our platform here.

Don’t forget that there may still be risks. For instance, we’ve identified 3 warning signs for Deepak Fertilisers And Petrochemicals that you should be aware of.

Valuation is complex, but we’re helping make it simple.

Find out whether Deepak Fertilisers And Petrochemicals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

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