Oswal Pumps Limited Recorded A 7.2% Miss On Revenue: Analysts Are Revisiting Their Models
Last week, you might have seen that Oswal Pumps Limited (NSE:OSWALPUMPS) released its quarterly result to the market. The early response was not positive, with shares down 7.7% to ₹301 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at ₹4.7b, statutory earnings were in line with expectations, at ₹34.73 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Oswal Pumps' three analysts are forecasting 2027 revenues to be ₹19.9b, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 13% to ₹25.70 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹19.8b and earnings per share (EPS) of ₹27.95 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 Oswal Pumps
The average price target fell 8.0% to ₹421, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Oswal Pumps analyst has a price target of ₹530 per share, while the most pessimistic values it at ₹340. 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 Oswal Pumps shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Oswal Pumps' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.0% annualised decline to the end of 2027. That is a notable change from historical growth of 29% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Oswal Pumps is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Oswal Pumps. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Oswal Pumps' future valuation.
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 Oswal Pumps going out to 2029, and you can see them free on our platform here.
You can also see our analysis of Oswal Pumps' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.