Need To Know: Analysts Just Made A Substantial Cut To Their Transformers and Rectifiers (India) Limited (NSE:TARIL) Estimates

Market forces rained on the parade of Transformers and Rectifiers (India) Limited (NSE:TARIL) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After this downgrade, Transformers and Rectifiers (India)'s two analysts are now forecasting revenues of ₹25b in 2026. This would be a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to be ₹8.70, roughly flat on the last 12 months. Prior to this update, the analysts had been forecasting revenues of ₹33b and earnings per share (EPS) of ₹11.40 in 2026. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Transformers and Rectifiers (India)

It'll come as no surprise then, to learn that the analysts have cut their price target 41% to ₹413.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Transformers and Rectifiers (India)'s rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 21% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Transformers and Rectifiers (India) to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Transformers and Rectifiers (India).

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Transformers and Rectifiers (India) that suggests the company could be somewhat overvalued. Find out why, and see how we estimate the valuation for free on our platform here.

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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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.