Revenue Miss: Transformers and Rectifiers (India) Limited Fell 7.7% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models
It's been a sad week for Transformers and Rectifiers (India) Limited (NSE:TARIL), who've watched their investment drop 12% to ₹294 in the week since the company reported its first-quarter result. Results look mixed - while revenue fell marginally short of analyst estimates at ₹5.7b, statutory earnings were in line with expectations, at ₹9.07 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Transformers and Rectifiers (India) after the latest results.
Taking into account the latest results, the current consensus from Transformers and Rectifiers (India)'s three analysts is for revenues of ₹30.7b in 2027. This would reflect a substantial 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 18% to ₹10.13. In the lead-up to this report, the analysts had been modelling revenues of ₹30.7b and earnings per share (EPS) of ₹9.83 in 2027. So the consensus seems to have become somewhat more optimistic on Transformers and Rectifiers (India)'s earnings potential following these results.
See our latest analysis for Transformers and Rectifiers (India)
There's been no major changes to the consensus price target of ₹344, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Transformers and Rectifiers (India) at ₹447 per share, while the most bearish prices it at ₹291. 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 Transformers and Rectifiers (India) shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Transformers and Rectifiers (India)'s past performance and to peers in the same industry. It's clear from the latest estimates that Transformers and Rectifiers (India)'s rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 21% 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Transformers and Rectifiers (India) is expected to grow much faster than its industry.
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 Transformers and Rectifiers (India) following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ₹344, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Transformers and Rectifiers (India) going out to 2029, and you can see them free on our platform here..
You can also view our analysis of Transformers and Rectifiers (India)'s balance sheet, and whether we think Transformers and Rectifiers (India) is carrying too much debt, 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.