Earnings Update: Here's Why Analysts Just Lifted Their ASK Automotive Limited (NSE:ASKAUTOLTD) Price Target To ₹464

Last week saw the newest first-quarter earnings release from ASK Automotive Limited (NSE:ASKAUTOLTD), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of ₹8.6b coming in 2.6% ahead of expectations, and statutory earnings per share of ₹8.81, in line with analyst appraisals. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for ASK Automotive

Taking into account the latest results, the consensus forecast from ASK Automotive's three analysts is for revenues of ₹35.4b in 2025. This reflects a solid 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 28% to ₹12.73. Before this earnings report, the analysts had been forecasting revenues of ₹35.2b and earnings per share (EPS) of ₹13.05 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 18% to ₹464, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ASK Automotive, with the most bullish analyst valuing it at ₹475 and the most bearish at ₹447 per share. This is a very narrow spread of estimates, implying either that ASK Automotive is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 pretty clear that there is an expectation that ASK Automotive's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% per year. Even after the forecast slowdown in growth, it seems obvious that ASK Automotive is also expected to grow faster than the wider 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, 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ASK Automotive going out to 2027, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with ASK Automotive .

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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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