Earnings Miss: Elgi Equipments Limited Missed EPS By 6.1% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Elgi Equipments Limited (NSE:ELGIEQUIP) filed its full-year result this time last week. The early response was not positive, with shares down 5.7% to ₹611 in the past week. Revenues of ₹32b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹9.86, missing estimates by 6.1%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Elgi Equipments

Taking into account the latest results, the consensus forecast from Elgi Equipments' five analysts is for revenues of ₹36.2b in 2025. This reflects a solid 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 24% to ₹12.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹37.0b and earnings per share (EPS) of ₹12.39 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of ₹558, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Elgi Equipments' market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Elgi Equipments analyst has a price target of ₹680 per share, while the most pessimistic values it at ₹345. 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. We can infer from the latest estimates that forecasts expect a continuation of Elgi Equipments'historical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. It's clear that while Elgi Equipments' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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

We also provide an overview of the Elgi Equipments Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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.