Revenue Miss: Engineers India Limited Fell 15% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models
Last week, you might have seen that Engineers India Limited (NSE:ENGINERSIN) released its first-quarter result to the market. The early response was not positive, with shares down 3.1% to ₹240 in the past week. Revenues were ₹8.2b, 15% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of ₹12.30 being in line with what the analysts forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Engineers India from twin analysts is for revenues of ₹43.9b in 2027. If met, it would imply a meaningful 13% increase on its revenue over the past 12 months. Statutory earnings per share are expected to crater 27% to ₹10.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹45.0b and earnings per share (EPS) of ₹12.50 in 2027. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
See our latest analysis for Engineers India
Despite the cuts to forecast earnings, there was no real change to the ₹278 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
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. It's clear from the latest estimates that Engineers India's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 3.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Engineers India is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Engineers India. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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 Engineers India. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Engineers India (including 1 which is a bit concerning) .
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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.