Earnings Miss: Torrent Power Limited Missed EPS By 16% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Torrent Power Limited (NSE:TORNTPOWER) filed its second-quarter result this time last week. The early response was not positive, with shares down 8.0% to ₹1,559 in the past week. It was not a great result overall. While revenues of ₹72b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 16% to hit ₹10.01 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Torrent Power

After the latest results, the nine analysts covering Torrent Power are now predicting revenues of ₹303.4b in 2025. If met, this would reflect a credible 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 12% to ₹52.10. Before this earnings report, the analysts had been forecasting revenues of ₹312.3b and earnings per share (EPS) of ₹55.47 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹1,487 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Torrent Power, with the most bullish analyst valuing it at ₹2,026 and the most bearish at ₹880 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Torrent Power's past performance and to peers in the same industry. We would highlight that Torrent Power's revenue growth is expected to slow, with the forecast 8.7% annualised growth rate until the end of 2025 being well below the historical 21% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.4% annually. Factoring in the forecast slowdown in growth, it looks like Torrent Power is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Torrent Power. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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. We have estimates - from multiple Torrent Power analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Torrent Power is showing 2 warning signs in our investment analysis , you should know about...

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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.