Revenue Beat: Hi-Tech Pipes Limited Beat Analyst Estimates By 32%
Last week, you might have seen that Hi-Tech Pipes Limited (NSE:HITECH) released its first-quarter result to the market. The early response was not positive, with shares down 6.8% to ₹78.22 in the past week. Revenue of ₹14b came in a notable 32% ahead of expectations, while statutory earnings of ₹3.77 were in line with what the analysts had been forecasting. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the twin analysts covering Hi-Tech Pipes are now predicting revenues of ₹49.6b in 2027. If met, this would reflect a satisfactory 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 20% to ₹4.45. Before this earnings report, the analysts had been forecasting revenues of ₹45.2b and earnings per share (EPS) of ₹7.60 in 2027. So it's pretty clear the analysts have mixed opinions on Hi-Tech Pipes after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.
Check out our latest analysis for Hi-Tech Pipes
There's been no major changes to the price target of ₹111, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Hi-Tech Pipes' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 18% 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. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hi-Tech Pipes.
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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at ₹111, 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 least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Hi-Tech Pipes 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.