AIA Engineering Limited Recorded A 18% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for AIA Engineering Limited (NSE:AIAENG), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Earnings fell badly short of analyst estimates, with ₹10b revenues missing by 18%, and statutory earnings per share (EPS) of ₹27.29 falling short of forecasts by some -11%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for AIA Engineering

Taking into account the latest results, AIA Engineering's 13 analysts currently expect revenues in 2025 to be ₹44.6b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be ₹113, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of ₹50.6b and earnings per share (EPS) of ₹121 in 2025. Indeed, we can see that sentiment has declined measurably after results came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.8% to ₹4,233. 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 AIA Engineering, with the most bullish analyst valuing it at ₹5,230 and the most bearish at ₹3,285 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AIA Engineering shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that AIA Engineering's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AIA Engineering.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of AIA Engineering's future valuation.

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 AIA Engineering analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - AIA Engineering has 1 warning sign we think 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.