Bharat Forge Limited Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Bharat Forge Limited (NSE:BHARATFORG), given that the company fell short of expectations when it released its half-year results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹78b, statutory earnings missed forecasts by an incredible 24%, coming in at just ₹5.23 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Bharat Forge

Taking into account the latest results, the most recent consensus for Bharat Forge from 23 analysts is for revenues of ₹167.9b in 2025. If met, it would imply a reasonable 6.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 44% to ₹29.36. Before this earnings report, the analysts had been forecasting revenues of ₹178.0b and earnings per share (EPS) of ₹33.67 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of ₹1,478, suggesting the downgrades are not expected to have a long-term impact on Bharat Forge's valuation. 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. There are some variant perceptions on Bharat Forge, with the most bullish analyst valuing it at ₹1,859 and the most bearish at ₹920 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bharat Forge's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Bharat Forge's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this to the 128 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it looks like Bharat Forge is forecast to grow at about the same rate as 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 Bharat Forge. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 Bharat Forge going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Bharat Forge you should know about.

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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.