Signatureglobal (India) Limited Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

Shareholders might have noticed that Signatureglobal (India) Limited (NSE:SIGNATURE) filed its second-quarter result this time last week. The early response was not positive, with shares down 3.3% to ₹1,042 in the past week. It was a pretty bad result overall, with revenues coming in 60% lower than the analysts predicted. Unsurprisingly, the statutory profit the analysts had been forecasting evaporated, turning into a loss of ₹3.34 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Taking into account the latest results, the current consensus from Signatureglobal (India)'s five analysts is for revenues of ₹40.3b in 2026. This would reflect a substantial 57% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 626% to ₹40.20. Before this earnings report, the analysts had been forecasting revenues of ₹41.8b and earnings per share (EPS) of ₹34.35 in 2026. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.

Check out our latest analysis for Signatureglobal (India)

The analysts have cut their price target 6.1% to ₹1,520per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Signatureglobal (India) at ₹1,786 per share, while the most bearish prices it at ₹1,275. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Signatureglobal (India)'s growth to accelerate, with the forecast 147% annualised growth to the end of 2026 ranking favourably alongside historical growth of 21% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Signatureglobal (India) is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Signatureglobal (India)'s earnings potential next year. They also downgraded Signatureglobal (India)'s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Signatureglobal (India). Long-term earnings power is much more important than next year's profits. We have forecasts for Signatureglobal (India) going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Signatureglobal (India) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.