Rail Vikas Nigam Limited (NSE:RVNL) Released Earnings Last Week And Analysts Lifted Their Price Target To ₹357

Shareholders might have noticed that Rail Vikas Nigam Limited (NSE:RVNL) filed its second-quarter result this time last week. The early response was not positive, with shares down 2.2% to ₹437 in the past week. Revenues came in 2.4% below expectations, at ₹49b. Statutory earnings per share were relatively better off, with a per-share profit of ₹7.55 being roughly in line with analyst estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Rail Vikas Nigam

Taking into account the latest results, the consensus forecast from Rail Vikas Nigam's twin analysts is for revenues of ₹216.7b in 2025. This reflects a reasonable 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 14% to ₹7.40. Before this earnings report, the analysts had been forecasting revenues of ₹231.1b and earnings per share (EPS) of ₹7.70 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

What's most unexpected is that the consensus price target rose 33% to ₹357, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rail Vikas Nigam's past performance and to peers in the same industry. It's clear from the latest estimates that Rail Vikas Nigam's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 10% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 13% per year. Rail Vikas Nigam is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. 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.

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 analyst estimates for Rail Vikas Nigam going out as far as 2027, and you can see them free on our platform here.

It might also be worth considering whether Rail Vikas Nigam's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.