EN
Results: Harsha Engineers International Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
Shareholders of Harsha Engineers International Limited (NSE:HARSHA) will be pleased this week, given that the stock price is up 10% to ₹457 following its latest quarterly results. The result was positive overall - although revenues of ₹4.4b were in line with what the analysts predicted, Harsha Engineers International surprised by delivering a statutory profit of ₹4.94 per share, modestly greater than expected. 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. 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, the consensus forecast from Harsha Engineers International's four analysts is for revenues of ₹18.7b in 2027. This reflects an okay 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 11% to ₹19.95. In the lead-up to this report, the analysts had been modelling revenues of ₹18.8b and earnings per share (EPS) of ₹19.05 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Harsha Engineers International
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to ₹536. 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. The most optimistic Harsha Engineers International analyst has a price target of ₹659 per share, while the most pessimistic values it at ₹462. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's clear from the latest estimates that Harsha Engineers International's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 8.8% p.a. over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 13% per year. Harsha Engineers International is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Harsha Engineers International following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Harsha Engineers International. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Harsha Engineers International analysts - going out to 2029, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Harsha Engineers International you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.