Elgi Equipments Limited Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next

As you might know, Elgi Equipments Limited (NSE:ELGIEQUIP) last week released its latest quarterly, and things did not turn out so great for shareholders. Elgi Equipments missed earnings this time around, with ₹8.2b revenue coming in 3.7% below what the analysts had modelled. Statutory earnings per share (EPS) of ₹2.65 also fell short of expectations by 12%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Elgi Equipments

After the latest results, the four analysts covering Elgi Equipments are now predicting revenues of ₹37.4b in 2025. If met, this would reflect a notable 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 2.4% to ₹12.52 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹37.4b and earnings per share (EPS) of ₹12.57 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.7% to ₹517. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. Currently, the most bullish analyst values Elgi Equipments at ₹690 per share, while the most bearish prices 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.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 12% per year. 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Elgi Equipments. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Elgi Equipments analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Elgi Equipments you should know about.

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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.