Orient Electric Limited Just Beat EPS By 35%: Here's What Analysts Think Will Happen Next
A week ago, Orient Electric Limited (NSE:ORIENTELEC) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of ₹9.5b, some 8.0% above estimates, and statutory earnings per share (EPS) coming in at ₹1.48, 35% ahead of expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the 13 analysts covering Orient Electric are now predicting revenues of ₹38.0b in 2027. If met, this would reflect a solid 8.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 20% to ₹6.16. Before this earnings report, the analysts had been forecasting revenues of ₹37.1b and earnings per share (EPS) of ₹5.98 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.
See our latest analysis for Orient Electric
Despite these upgrades,the analysts have not made any major changes to their price target of ₹238, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Orient Electric, with the most bullish analyst valuing it at ₹284 and the most bearish at ₹191 per share. 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 Orient Electric's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. So it's clear that despite the acceleration in growth, Orient Electric is expected to grow meaningfully slower than the industry average.
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 Orient Electric following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at ₹238, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Orient Electric. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Orient Electric going out to 2029, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for Orient Electric that you need to be mindful of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.