Samvardhana Motherson International Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Samvardhana Motherson International Limited (NSE:MOTHERSON) had a good week, as its shares rose 7.9% to close at ₹151 following the release of its annual results. Revenues were ₹978b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of ₹4.01 were also better than expected, beating analyst predictions by 18%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Samvardhana Motherson International

Taking into account the latest results, the current consensus from Samvardhana Motherson International's 17 analysts is for revenues of ₹1.18t in 2025. This would reflect a huge 20% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 55% to ₹6.23. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹1.17t and earnings per share (EPS) of ₹5.90 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 17% to ₹157, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Samvardhana Motherson International, with the most bullish analyst valuing it at ₹180 and the most bearish at ₹85.03 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 Samvardhana Motherson International's past performance and to peers in the same industry. It's clear from the latest estimates that Samvardhana Motherson International's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Samvardhana Motherson International is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Samvardhana Motherson International following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Samvardhana Motherson International. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Samvardhana Motherson International analysts - 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 1 warning sign for Samvardhana Motherson International 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.