Earnings Update: RHI Magnesita India Limited (NSE:RHIM) Just Reported And Analysts Are Trimming Their Forecasts

Shareholders might have noticed that RHI Magnesita India Limited (NSE:RHIM) filed its third-quarter result this time last week. The early response was not positive, with shares down 8.9% to ₹640 in the past week. Revenues were ₹9.2b, and RHI Magnesita India was a dismal 13% short of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for RHI Magnesita India

Taking into account the latest results, the current consensus from RHI Magnesita India's twin analysts is for revenues of ₹45.2b in 2025. This would reflect a substantial 22% increase on its revenue over the past 12 months. RHI Magnesita India is also expected to turn profitable, with statutory earnings of ₹15.80 per share. In the lead-up to this report, the analysts had been modelling revenues of ₹48.6b and earnings per share (EPS) of ₹18.30 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 11% to ₹736, with the weaker earnings outlook clearly leading valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that RHI Magnesita India's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.5% annually. Factoring in the forecast slowdown in growth, it's pretty clear that RHI Magnesita India is still expected 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for RHI Magnesita India you should know about.

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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.