Ramco Systems Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

Ramco Systems Limited (NSE:RAMCOSYS) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 6.1% to hit ₹1.7b. Ramco Systems also reported a statutory profit of ₹5.84, which was an impressive 24% above what the analyst had forecast. The analyst 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. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

Check out our latest analysis for Ramco Systems

Taking into account the latest results, the most recent consensus for Ramco Systems from lone analyst is for revenues of ₹7.72b in 2022 which, if met, would be a sizeable 27% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 82% to ₹25.30. In the lead-up to this report, the analyst had been modelling revenues of ₹7.07b and earnings per share (EPS) of ₹22.30 in 2022. So it seems there's been a definite increase in optimism about Ramco Systems' future following the latest results, with a nice increase in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analyst has increased their price target for Ramco Systems 8.1% to ₹600on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Ramco Systems' rate of growth is expected to accelerate meaningfully, with the forecast 27% revenue growth noticeably faster than its historical growth of 7.2%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Ramco Systems to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ramco Systems following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

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 2023, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Ramco Systems , and understanding these should be part of your investment process.

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