Samvardhana Motherson International Limited Just Missed Earnings - But Analysts Have Updated Their Models

Last week saw the newest quarterly earnings release from Samvardhana Motherson International Limited (NSE:MOTHERSON), an important milestone in the company's journey to build a stronger business. Statutory earnings per share fell badly short of expectations, coming in at ₹0.48, some 50% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at ₹302b. 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.

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Taking into account the latest results, the most recent consensus for Samvardhana Motherson International from 22 analysts is for revenues of ₹1.24t in 2026. If met, it would imply a satisfactory 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 24% to ₹3.89. Before this earnings report, the analysts had been forecasting revenues of ₹1.23t and earnings per share (EPS) of ₹4.32 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

See our latest analysis for Samvardhana Motherson International

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹108, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. Currently, the most bullish analyst values Samvardhana Motherson International at ₹130 per share, while the most bearish prices it at ₹75.01. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Samvardhana Motherson International's revenue growth is expected to slow, with the forecast 9.8% annualised growth rate until the end of 2026 being well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.8% annually. Factoring in the forecast slowdown in growth, it looks like Samvardhana Motherson International 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 Samvardhana Motherson International. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

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. At Simply Wall St, we have a full range of analyst estimates for Samvardhana Motherson International going out to 2028, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Samvardhana Motherson International that we have uncovered.

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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.