Mphasis Limited (NSE:MPHASIS) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

Simply Wall St · 10/19 02:03

Investors in Mphasis Limited (NSE:MPHASIS) had a good week, as its shares rose 7.6% to close at ₹3,096 following the release of its second-quarter results. It was a credible result overall, with revenues of ₹35b and statutory earnings per share of ₹22.18 both in line with analyst estimates, showing that Mphasis is executing in line with 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Mphasis

earnings-and-revenue-growth
NSEI:MPHASIS Earnings and Revenue Growth October 19th 2024

Taking into account the latest results, the most recent consensus for Mphasis from 30 analysts is for revenues of ₹142.4b in 2025. If met, it would imply a reasonable 3.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 7.3% to ₹90.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹142.1b and earnings per share (EPS) of ₹90.15 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of ₹3,082, suggesting that the company has met expectations in its recent result. 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 Mphasis at ₹3,800 per share, while the most bearish prices it at ₹2,060. 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 Mphasis shareholders.

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. We would highlight that Mphasis' revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. Compare this to the 138 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.8% per year. Factoring in the forecast slowdown in growth, it looks like Mphasis is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹3,082, 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. At Simply Wall St, we have a full range of analyst estimates for Mphasis going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Mphasis has 2 warning signs we think you should be aware of.