Need To Know: Analysts Just Made A Substantial Cut To Their Transformers and Rectifiers (India) Limited (NSE:TARIL) Estimates
One thing we could say about the analysts on Transformers and Rectifiers (India) Limited (NSE:TARIL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the latest consensus from Transformers and Rectifiers (India)'s dual analysts is for revenues of ₹31b in 2027, which would reflect a substantial 20% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to step up 15% to ₹10.10. Previously, the analysts had been modelling revenues of ₹35b and earnings per share (EPS) of ₹11.70 in 2027. Indeed, we can see that the analysts are a lot more bearish about Transformers and Rectifiers (India)'s prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Transformers and Rectifiers (India)
The consensus price target fell 7.4% to ₹369, with the weaker earnings outlook clearly leading analyst valuation estimates.
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. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 20% per year. It's clear that while Transformers and Rectifiers (India)'s revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Transformers and Rectifiers (India).
That said, the analysts might have good reason to be negative on Transformers and Rectifiers (India), given concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, for free on our platform here.
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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.