Revenue Beat: RITES Limited Beat Analyst Estimates By 6.1%

RITES Limited (NSE:RITES) shareholders are probably feeling a little disappointed, since its shares fell 2.9% to ₹701 in the week after its latest quarterly results. It was a workmanlike result, with revenues of ₹6.8b coming in 6.1% ahead of expectations, and statutory earnings per share of ₹22.56, in line with analyst appraisals. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on RITES after the latest results.

View our latest analysis for RITES

Following the latest results, RITES' two analysts are now forecasting revenues of ₹30.6b in 2025. This would be a huge 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to ₹24.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹31.1b and earnings per share (EPS) of ₹28.20 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹506, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

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. It's clear from the latest estimates that RITES' rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RITES to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 RITES going out as far as 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for RITES you should be aware of, and 1 of them is concerning.

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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.