Tata Technologies Limited Just Missed EPS By 8.6%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Tata Technologies Limited (NSE:TATATECH) released its second-quarter result to the market. The early response was not positive, with shares down 3.3% to ₹1,006 in the past week. Revenues of ₹13b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹3.87, missing estimates by 8.6%. 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.

View our latest analysis for Tata Technologies

After the latest results, the ten analysts covering Tata Technologies are now predicting revenues of ₹53.3b in 2025. If met, this would reflect a satisfactory 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 6.6% to ₹17.00. Before this earnings report, the analysts had been forecasting revenues of ₹55.3b and earnings per share (EPS) of ₹18.54 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of ₹988, suggesting the downgrades are not expected to have a long-term impact on Tata Technologies' 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 Tata Technologies analyst has a price target of ₹1,340 per share, while the most pessimistic values it at ₹650. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that Tata Technologies' revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Tata Technologies 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 Tata Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Tata Technologies going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Tata Technologies , and understanding this should be part of your investment process.

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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.