Earnings Miss: Sundram Fasteners Limited Missed EPS By 5.8% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Sundram Fasteners Limited (NSE:SUNDRMFAST) filed its second-quarter result this time last week. The early response was not positive, with shares down 3.5% to ₹1,295 in the past week. Sundram Fasteners beat revenue expectations by 2.7%, at ₹15b. Statutory earnings per share (EPS) came in at ₹6.78, some 5.8% short of analyst estimates. 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 Sundram Fasteners

Taking into account the latest results, Sundram Fasteners' three analysts currently expect revenues in 2025 to be ₹58.9b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 29% to ₹33.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹65.4b and earnings per share (EPS) of ₹34.60 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹1,479 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Sundram Fasteners, with the most bullish analyst valuing it at ₹1,576 and the most bearish at ₹1,400 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's pretty clear that there is an expectation that Sundram Fasteners' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sundram Fasteners is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at ₹1,479, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Sundram Fasteners. Long-term earnings power is much more important than next year's profits. We have forecasts for Sundram Fasteners going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Sundram Fasteners .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.