Earnings Beat: Syrma SGS Technology Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

The investors in Syrma SGS Technology Limited's (NSE:SYRMA) will be rubbing their hands together with glee today, after the share price leapt 26% to ₹497 in the week following its quarterly results. Revenues missed the mark, coming in 13% below forecasts, at ₹8.3b. Statutory profits were better overall though, with per-share profits of ₹2.03 being a notable 19% above what the analysts were modelling. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Syrma SGS Technology

Taking into account the latest results, the current consensus from Syrma SGS Technology's 17 analysts is for revenues of ₹45.0b in 2025. This would reflect a decent 17% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 43% to ₹8.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹45.9b and earnings per share (EPS) of ₹8.44 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ₹503. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Syrma SGS Technology analyst has a price target of ₹680 per share, while the most pessimistic values it at ₹322. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Syrma SGS Technology's revenue growth is expected to slow, with the forecast 38% annualised growth rate until the end of 2025 being well below the historical 53% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 24% per year. Even after the forecast slowdown in growth, it seems obvious that Syrma SGS Technology is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Syrma SGS Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Syrma SGS Technology going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Syrma SGS Technology that you need to take into consideration.

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.