Bharat Heavy Electricals Limited Just Missed EPS By 50%: Here's What Analysts Think Will Happen Next

As you might know, Bharat Heavy Electricals Limited (NSE:BHEL) last week released its latest full-year, and things did not turn out so great for shareholders. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of ₹283b missed by 13%, and statutory earnings per share of ₹1.53 fell short of forecasts by 50%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the latest results, Bharat Heavy Electricals' 15 analysts are now forecasting revenues of ₹392.7b in 2026. This would be a substantial 39% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 347% to ₹6.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹424.2b and earnings per share (EPS) of ₹7.87 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

See our latest analysis for Bharat Heavy Electricals

The analysts made no major changes to their price target of ₹214, suggesting the downgrades are not expected to have a long-term impact on Bharat Heavy Electricals' valuation. 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. The most optimistic Bharat Heavy Electricals analyst has a price target of ₹360 per share, while the most pessimistic values it at ₹70.02. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The analysts are definitely expecting Bharat Heavy Electricals' growth to accelerate, with the forecast 39% annualised growth to the end of 2026 ranking favourably alongside historical growth of 9.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 21% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Bharat Heavy Electricals to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bharat Heavy Electricals. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at ₹214, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Bharat Heavy Electricals analysts - going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Bharat Heavy Electricals' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.