Orient Electric Limited Just Recorded A 41% EPS Beat: Here's What Analysts Are Forecasting Next

Orient Electric Limited (NSE:ORIENTELEC) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 8.2% to hit ₹8.8b. Orient Electric also reported a statutory profit of ₹1.27, which was an impressive 41% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Orient Electric after the latest results.

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Taking into account the latest results, the consensus forecast from Orient Electric's 15 analysts is for revenues of ₹39.3b in 2027. This reflects a satisfactory 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 16% to ₹6.80. Before this earnings report, the analysts had been forecasting revenues of ₹38.1b and earnings per share (EPS) of ₹6.27 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

View our latest analysis for Orient Electric

It will come as no surprise to learn that the analysts have increased their price target for Orient Electric 7.0% to ₹257on the back of these upgrades. 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. There are some variant perceptions on Orient Electric, with the most bullish analyst valuing it at ₹295 and the most bearish at ₹225 per share. This is a very narrow spread of estimates, implying either that Orient Electric is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Orient Electric's growth to accelerate, with the forecast 14% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Orient Electric is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Orient Electric's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Orient Electric will grow in line with the overall 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 estimates - from multiple Orient Electric analysts - going out to 2029, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Orient Electric .

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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.