Earnings Update: Here's Why Analysts Just Lifted Their Tilaknagar Industries Ltd. (NSE:TI) Price Target To ₹660
Tilaknagar Industries Ltd. (NSE:TI) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to ₹472 in the week after its latest second-quarter results. Results were roughly in line with estimates, with revenues of ₹10b and statutory earnings per share of ₹0.96. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Tilaknagar Industries' seven analysts is for revenues of ₹44.6b in 2027. This reflects a major 22% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Tilaknagar Industries forecast to report a statutory profit of ₹7.65 per share. In the lead-up to this report, the analysts had been modelling revenues of ₹45.5b and earnings per share (EPS) of ₹10.90 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
See our latest analysis for Tilaknagar Industries
Despite cutting their earnings forecasts,the analysts have lifted their price target 6.3% to ₹660, suggesting that these impacts are not expected to weigh on the stock's value in the long term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Tilaknagar Industries analyst has a price target of ₹730 per share, while the most pessimistic values it at ₹540. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting Tilaknagar Industries' growth to accelerate, with the forecast 49% annualised growth to the end of 2027 ranking favourably alongside historical growth of 27% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tilaknagar Industries to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tilaknagar Industries. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 forecasts for Tilaknagar Industries going out to 2029, and you can see them free on our platform here.
Even so, be aware that Tilaknagar Industries is showing 1 warning sign in our investment analysis , you should know about...
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