KPIT Technologies Limited Just Missed Earnings - But Analysts Have Updated Their Models
KPIT Technologies Limited (NSE:KPITTECH) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were in line with forecasts, at ₹17b, although statutory earnings per share came in 16% below what the analysts expected, at ₹4.40 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, KPIT Technologies' 20 analysts currently expect revenues in 2027 to be ₹68.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 4.2% to ₹20.44. In the lead-up to this report, the analysts had been modelling revenues of ₹67.5b and earnings per share (EPS) of ₹21.29 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
See our latest analysis for KPIT Technologies
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹631, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values KPIT Technologies at ₹870 per share, while the most bearish prices it at ₹485. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 pretty clear that there is an expectation that KPIT Technologies' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that KPIT Technologies is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that KPIT Technologies' revenue is expected to perform worse than the wider industry. The consensus price target held steady at ₹631, 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 KPIT Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for KPIT Technologies going out to 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 KPIT Technologies that you should be aware of.
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