Shyam Metalics and Energy Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Shyam Metalics and Energy Limited (NSE:SHYAMMETL) shareholders, because the company has just released its latest second-quarter results, and the shares gained 3.7% to ₹702. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at ₹29b, statutory earnings beat expectations by a notable 182%, coming in at ₹18.89 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Shyam Metalics and Energy

Taking into account the latest results, the most recent consensus for Shyam Metalics and Energy from five analysts is for revenues of ₹140.0b in 2024. If met, it would imply a reasonable 7.9% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 12% to ₹34.00 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹138.8b and earnings per share (EPS) of ₹37.50 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 11% to ₹654, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. Currently, the most bullish analyst values Shyam Metalics and Energy at ₹840 per share, while the most bearish prices it at ₹533. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shyam Metalics and Energy's past performance and to peers in the same industry. We would highlight that Shyam Metalics and Energy's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 24% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.5% annually. So it's pretty clear that, while Shyam Metalics and Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shyam Metalics and Energy. Happily, there were no major changes to revenue forecasts, with the business still expected to 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Shyam Metalics and Energy going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Shyam Metalics and Energy that we have uncovered.

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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.