Sandhar Technologies Limited Just Missed EPS By 87%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Sandhar Technologies Limited (NSE:SANDHAR), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Unfortunately, Sandhar Technologies delivered a serious earnings miss. Revenues of ₹4.1b were 12% below expectations, and statutory earnings per share of ₹0.35 missed estimates by 87%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Sandhar Technologies

Taking into account the latest results, the current consensus from Sandhar Technologies' twin analysts is for revenues of ₹23.1b in 2022, which would reflect an okay 7.8% increase on its sales over the past 12 months. Per-share earnings are expected to grow 14% to ₹17.10. In the lead-up to this report, the analysts had been modelling revenues of ₹22.6b and earnings per share (EPS) of ₹17.30 in 2022. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

The analysts increased their price target 17% to ₹403, perhaps signalling that higher revenues are a strong leading indicator for Sandhar Technologies's valuation.

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. One thing stands out from these estimates, which is that Sandhar Technologies is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2022. If achieved, this would be a much better result than the 8.0% annual decline over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. Although Sandhar Technologies' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

You still need to take note of risks, for example - Sandhar Technologies has 2 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. 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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