Results: Sundram Fasteners Limited Beat Earnings Expectations And Analysts Now Have New Forecasts
Sundram Fasteners Limited (NSE:SUNDRMFAST) just released its quarterly report and things are looking bullish. Sundram Fasteners delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting ₹18b-17% above indicated-and₹8.01-23% above forecasts- respectively Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the three analysts covering Sundram Fasteners are now predicting revenues of ₹73.7b in 2027. If met, this would reflect a decent 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 13% to ₹33.00. In the lead-up to this report, the analysts had been modelling revenues of ₹68.8b and earnings per share (EPS) of ₹33.53 in 2027. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.
See our latest analysis for Sundram Fasteners
As a result, it might come as a surprise that the consensus price target has been cut 15% to ₹1,062, which could suggest that these earnings are considered less valuable by the market than previously. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sundram Fasteners at ₹1,173 per share, while the most bearish prices it at ₹950. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Sundram Fasteners' rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 5.9% 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 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sundram Fasteners to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Sundram Fasteners going out to 2029, and you can see them free on our platform here..
You still need to take note of risks, for example - Sundram Fasteners has 1 warning sign we think 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.