EFC (I) Limited Just Missed Revenue By 13%: Here's What Analysts Think Will Happen Next
EFC (I) Limited (NSE:EFCIL) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were ₹2.8b, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of ₹16.87 being in line with what the analyst forecast. Following the result, the analyst has 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from EFC (I)'s sole analyst is for revenues of ₹14.0b in 2027. This reflects a sizeable 27% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 16% to ₹20.20. Yet prior to the latest earnings, the analyst had been anticipated revenues of ₹14.0b and earnings per share (EPS) of ₹29.70 in 2027. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
See our latest analysis for EFC (I)
The average price target fell 27% to ₹275, with reduced earnings forecasts clearly tied to a lower valuation estimate.
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. We would highlight that EFC (I)'s revenue growth is expected to slow, with the forecast 37% annualised growth rate until the end of 2027 being well below the historical 60% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while EFC (I)'s revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for EFC (I). Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of EFC (I)'s future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for EFC (I) going out as far as 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for EFC (I) that you should be aware of.
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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.