This Broker Just Slashed Their Elin Electronics Limited (NSE:ELIN) Earnings Forecasts

One thing we could say about the covering analyst on Elin Electronics Limited (NSE:ELIN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Elin Electronics' lone analyst is for revenues of ₹11b in 2024 which - if met - would reflect a modest 6.4% increase on its sales over the past 12 months. Per-share earnings are expected to leap 44% to ₹4.00. Before this latest update, the analyst had been forecasting revenues of ₹12b and earnings per share (EPS) of ₹10.00 in 2024. Indeed, we can see that the analyst is a lot more bearish about Elin Electronics' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Elin Electronics

The consensus price target fell 6.3% to ₹225, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Elin Electronics' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Elin Electronics is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.4% annualised growth until the end of 2024. If achieved, this would be a much better result than the 15% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 21% annually for the foreseeable future. Although Elin Electronics' revenues are expected to improve, it seems that the analyst is still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Elin Electronics. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Elin Electronics.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.