Shareholders of Bajaj Finserv Ltd. (NSE:BAJAJFINSV) will be pleased this week, given that the stock price is up 10% to ₹1,835 following its latest second-quarter results. Revenue of ₹434b beat expectations by an impressive 27%, while statutory earnings per share (EPS) were ₹17.12, in line with estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the seven analysts covering Bajaj Finserv are now predicting revenues of ₹1.69t in 2027. If met, this would reflect a satisfactory 3.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 13% to ₹75.07. Before this earnings report, the analysts had been forecasting revenues of ₹1.69t and earnings per share (EPS) of ₹76.63 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.
Check out our latest analysis for Bajaj Finserv
The consensus price target held steady at ₹2,340, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Bajaj Finserv analyst has a price target of ₹2,640 per share, while the most pessimistic values it at ₹1,690. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Bajaj Finserv's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 20% 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 Bajaj Finserv.
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, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bajaj Finserv's revenue is expected to perform worse 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 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 Bajaj Finserv going out to 2029, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Bajaj Finserv that you should be aware of.
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