Varroc Engineering Limited Just Recorded A 88% EPS Beat: Here's What Analysts Are Forecasting Next

Varroc Engineering Limited (NSE:VARROC) shareholders are probably feeling a little disappointed, since its shares fell 2.4% to ₹511 in the week after its latest quarterly results. Revenues were ₹20b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at ₹6.88, an impressive 88% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Varroc Engineering from five analysts is for revenues of ₹89.5b in 2026. If met, it would imply a solid 8.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 180% to ₹24.50. In the lead-up to this report, the analysts had been modelling revenues of ₹90.5b and earnings per share (EPS) of ₹24.13 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Varroc Engineering

There were no changes to revenue or earnings estimates or the price target of ₹588, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Varroc Engineering analyst has a price target of ₹725 per share, while the most pessimistic values it at ₹480. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Varroc Engineering 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 2026. If achieved, this would be a much better result than the 6.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.7% per year. So it looks like Varroc Engineering is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹588, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Varroc Engineering analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Varroc Engineering you should be aware of.

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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.