CG Power and Industrial Solutions Limited Just Missed Earnings - But Analysts Have Updated Their Models
CG Power and Industrial Solutions Limited (NSE:CGPOWER) just released its latest first-quarter report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹33b, statutory earnings missed forecasts by 11%, coming in at just ₹1.99 per share. 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 20 analysts covering CG Power and Industrial Solutions are now predicting revenues of ₹155.5b in 2027. If met, this would reflect a major 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 27% to ₹10.07. Before this earnings report, the analysts had been forecasting revenues of ₹156.7b and earnings per share (EPS) of ₹10.30 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 CG Power and Industrial Solutions
The consensus price target held steady at ₹928, 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 CG Power and Industrial Solutions analyst has a price target of ₹1,100 per share, while the most pessimistic values it at ₹627. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CG Power and Industrial Solutions shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that CG Power and Industrial Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 20% 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 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CG Power and Industrial Solutions to grow faster than the wider industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple CG Power and Industrial Solutions analysts - going out to 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.