Cyient Limited Just Missed EPS By 17%: Here's What Analysts Think Will Happen Next
Investors in Cyient Limited (NSE:CYIENT) had a good week, as its shares rose 3.2% to close at ₹1,233 following the release of its second-quarter results. Results were mixed, with revenues of ₹22b exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were ₹11.47 per share, -17% below whatthe analysts had forecast. 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.
Following the latest results, Cyient's 16 analysts are now forecasting revenues of ₹92.3b in 2027. This would be a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 55% to ₹55.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹90.8b and earnings per share (EPS) of ₹57.20 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for Cyient
Despite cutting their earnings forecasts,the analysts have lifted their price target 12% to ₹1,220, suggesting that these impacts are not expected to weigh on the stock's value in the long term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Cyient, with the most bullish analyst valuing it at ₹1,454 and the most bearish at ₹985 per share. 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 Cyient shareholders.
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 Cyient's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cyient 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 also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. We have forecasts for Cyient 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 2 warning signs for Cyient that you need to be mindful of.
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