Bearish: Analysts Just Cut Their Lakshmi Machine Works Limited (NSE:LAXMIMACH) Revenue and EPS estimates

The analysts covering Lakshmi Machine Works Limited (NSE:LAXMIMACH) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the consensus from twin analysts covering Lakshmi Machine Works is for revenues of ₹43b in 2025, implying an uneasy 10% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to shrink 9.6% to ₹316 in the same period. Prior to this update, the analysts had been forecasting revenues of ₹51b and earnings per share (EPS) of ₹401 in 2025. Indeed, we can see that the analysts are a lot more bearish about Lakshmi Machine Works' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Lakshmi Machine Works

It'll come as no surprise then, to learn that the analysts have cut their price target 7.7% to ₹11,817.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2025. This indicates a significant reduction from annual growth of 25% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Lakshmi Machine Works' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Lakshmi Machine Works. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lakshmi Machine Works' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Lakshmi Machine Works' business, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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