Engineers India Limited Just Missed EPS By 32%: Here's What Analysts Think Will Happen Next

Engineers India Limited (NSE:ENGINERSIN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results overall were not great, with earnings of ₹3.99 per share falling drastically short of analyst expectations. Meanwhile revenues hit ₹31b and were slightly better than forecasts. 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.

See our latest analysis for Engineers India

Taking into account the latest results, the consensus forecast from Engineers India's two analysts is for revenues of ₹34.0b in 2022, which would reflect a notable 8.1% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 83% to ₹7.30. In the lead-up to this report, the analysts had been modelling revenues of ₹34.9b and earnings per share (EPS) of ₹7.47 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

What's most unexpected is that the consensus price target rose 6.6% to ₹96.86, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Engineers India's revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2022 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Engineers India.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Engineers India going out as far as 2023, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Engineers India you should know about.

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