Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) Just Reported And Analysts Have Been Cutting Their Estimates

Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. It definitely looks like a negative result overall with revenues falling 12% short of analyst estimates at ₹30b. Statutory losses were ₹10.40 per share, 58% bigger than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Sterling and Wilson Renewable Energy

Following the latest results, Sterling and Wilson Renewable Energy's twin analysts are now forecasting revenues of ₹89.4b in 2025. This would be a huge 195% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Sterling and Wilson Renewable Energy forecast to report a statutory profit of ₹22.05 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹113.4b and earnings per share (EPS) of ₹27.75 in 2025. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The average price target climbed 16% to ₹843despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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. One thing stands out from these estimates, which is that Sterling and Wilson Renewable Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 195% annualised growth until the end of 2025. If achieved, this would be a much better result than the 23% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. Not only are Sterling and Wilson Renewable Energy's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sterling and Wilson Renewable Energy. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Sterling and Wilson Renewable Energy that you should be aware of.

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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.