Bharat Forge Limited (NSE:BHARATFORG) shareholders are probably feeling a little disappointed, since its shares fell 5.3% to ₹2,082 in the week after its latest first-quarter results. The results don't look great, especially considering that the analysts had been forecasting a profit and Bharat Forge delivered a statutory loss of ₹1.88 per share. Revenues of ₹46b did beat expectations by 4.1% though. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Bharat Forge's 24 analysts is for revenues of ₹198.7b in 2027. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 135% to ₹34.72. Before this earnings report, the analysts had been forecasting revenues of ₹198.1b and earnings per share (EPS) of ₹36.86 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
View our latest analysis for Bharat Forge
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 6.0% to ₹1,990, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Bharat Forge analyst has a price target of ₹2,505 per share, while the most pessimistic values it at ₹1,202. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Bharat Forge's growth to accelerate, with the forecast 18% annualised growth to the end of 2027 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Bharat Forge is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 also a nice increase in the price target, with the analysts 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. We have forecasts for Bharat Forge going out to 2029, 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 4 warning signs with Bharat Forge , and understanding them 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.