Bharat Electronics Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Bharat Electronics Limited (NSE:BEL) just released its yearly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.4% to hit ₹141b. Bharat Electronics also reported a statutory profit of ₹8.62, which was an impressive 22% above what the analysts had forecast. 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.

Check out our latest analysis for Bharat Electronics

Following the latest results, Bharat Electronics' six analysts are now forecasting revenues of ₹160.7b in 2022. This would be a solid 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 15% to ₹9.92. Before this earnings report, the analysts had been forecasting revenues of ₹152.6b and earnings per share (EPS) of ₹8.61 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 28% to ₹186per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Bharat Electronics at ₹227 per share, while the most bearish prices it at ₹67.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The analysts are definitely expecting Bharat Electronics' growth to accelerate, with the forecast 14% annualised growth to the end of 2022 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 17% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Bharat Electronics is expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bharat Electronics' earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have estimates - from multiple Bharat Electronics analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Bharat Electronics that you should be aware of.

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