Earnings Miss: Tata Elxsi Limited Missed EPS By 12% And Analysts Are Revising Their Forecasts
Last week, you might have seen that Tata Elxsi Limited (NSE:TATAELXSI) released its quarterly result to the market. The early response was not positive, with shares down 2.3% to ₹3,538 in the past week. It was not a great result overall. While revenues of ₹10b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit ₹27.38 per share. 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. 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 consensus forecast from Tata Elxsi's 16 analysts is for revenues of ₹41.8b in 2027. This reflects a modest 6.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 15% to ₹121. In the lead-up to this report, the analysts had been modelling revenues of ₹42.2b and earnings per share (EPS) of ₹134 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
See our latest analysis for Tata Elxsi
The average price target fell 12% to ₹3,643, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Tata Elxsi at ₹5,135 per share, while the most bearish prices it at ₹2,960. 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 Tata Elxsi shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 9.2% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Tata Elxsi is expected to grow slower than similar companies in the same 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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tata Elxsi's revenue is expected to 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 Tata Elxsi's future valuation.
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 Tata Elxsi going out to 2029, and you can see them free on our platform here..
We also provide an overview of the Tata Elxsi Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.