The analysts might have been a bit too bullish on Mazagon Dock Shipbuilders Limited (NSE:MAZDOCK), given that the company fell short of expectations when it released its quarterly results last week. Unfortunately, Mazagon Dock Shipbuilders delivered a serious earnings miss. Revenues of ₹24b were 17% below expectations, and statutory earnings per share of ₹8.53 missed estimates by 40%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, Mazagon Dock Shipbuilders' 14 analysts currently expect revenues in 2027 to be ₹128.1b, approximately in line with the last 12 months. Per-share earnings are expected to rise 3.5% to ₹58.37. Before this earnings report, the analysts had been forecasting revenues of ₹141.1b and earnings per share (EPS) of ₹69.80 in 2027. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
See our latest analysis for Mazagon Dock Shipbuilders
It'll come as no surprise then, to learn that the analysts have cut their price target 14% to ₹2,160. 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. Currently, the most bullish analyst values Mazagon Dock Shipbuilders at ₹2,950 per share, while the most bearish prices it at ₹1,490. 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.
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. It's pretty clear that there is an expectation that Mazagon Dock Shipbuilders' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Mazagon Dock Shipbuilders.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mazagon Dock Shipbuilders. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mazagon Dock Shipbuilders going out to 2029, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Mazagon Dock Shipbuilders that you should be aware of.
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