Ramkrishna Forgings Limited Just Recorded A 12% Revenue Beat: Here's What Analysts Think

Ramkrishna Forgings Limited (NSE:RKFORGE) defied analyst predictions to release its annual results, which were ahead of market expectations. Ramkrishna Forgings beat expectations, with revenue hitting ₹40b (12% ahead of estimates) and EPS reaching ₹20.09 (a 6.9% beat). The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Ramkrishna Forgings

Following the latest results, Ramkrishna Forgings' six analysts are now forecasting revenues of ₹41.1b in 2025. This would be an okay 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 35% to ₹25.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹42.5b and earnings per share (EPS) of ₹26.99 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of ₹775, suggesting the downgrades are not expected to have a long-term impact on Ramkrishna Forgings' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ramkrishna Forgings analyst has a price target of ₹915 per share, while the most pessimistic values it at ₹555. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ramkrishna Forgings shareholders.

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 pretty clear that there is an expectation that Ramkrishna Forgings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ramkrishna Forgings is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ramkrishna Forgings. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at ₹775, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for Ramkrishna Forgings going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Ramkrishna Forgings 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.