Earnings Update: Elgi Equipments Limited (NSE:ELGIEQUIP) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

It's been a mediocre week for Elgi Equipments Limited (NSE:ELGIEQUIP) shareholders, with the stock dropping 13% to ₹570 in the week since its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at ₹8.7b, statutory earnings were in line with expectations, at ₹2.99 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Elgi Equipments after the latest results.

See our latest analysis for Elgi Equipments

After the latest results, the four analysts covering Elgi Equipments are now predicting revenues of ₹35.6b in 2025. If met, this would reflect an okay 5.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 17% to ₹12.15. Before this earnings report, the analysts had been forecasting revenues of ₹36.1b and earnings per share (EPS) of ₹12.25 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of ₹701, showing that the business is executing well and in line with expectations. 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 Elgi Equipments analyst has a price target of ₹835 per share, while the most pessimistic values it at ₹497. 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.

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 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 15% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although Elgi Equipments is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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 ₹701, 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 forecasts for Elgi Equipments going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Elgi Equipments' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.