Earnings Miss: Praj Industries Limited Missed EPS By 30% And Analysts Are Revising Their Forecasts

The second-quarter results for Praj Industries Limited (NSE:PRAJIND) were released last week, making it a good time to revisit its performance. Results were mixed, with revenues of ₹8.4b exceeding expectations, even as statutory earnings per share (EPS) fell badly short. Earnings were ₹1.05 per share, -30% short of analyst expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, Praj Industries' seven analysts currently expect revenues in 2026 to be ₹31.6b, approximately in line with the last 12 months. Per-share earnings are expected to surge 28% to ₹7.33. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹32.3b and earnings per share (EPS) of ₹8.40 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

See our latest analysis for Praj Industries

The consensus price target fell 8.2% to ₹422, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Praj Industries, with the most bullish analyst valuing it at ₹500 and the most bearish at ₹353 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Praj Industries shareholders.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.3% by the end of 2026. This indicates a significant reduction from annual growth of 18% 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 14% per year. It's pretty clear that Praj Industries' revenues are expected to perform substantially worse than the wider industry.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Praj Industries. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Praj Industries going out to 2028, and you can see them free on our platform here..

Even so, be aware that Praj Industries is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...

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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.