Chemplast Sanmar Limited (NSE:CHEMPLASTS) Just Reported, And Analysts Assigned A ₹298 Price Target
Shareholders might have noticed that Chemplast Sanmar Limited (NSE:CHEMPLASTS) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.4% to ₹184 in the past week. The result was fairly weak overall, with revenues of ₹11b being 5.5% less than what the analysts had been modelling. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Chemplast Sanmar's four analysts is for revenues of ₹47.6b in 2027. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 81% to ₹4.80 per share. Before this earnings report, the analysts had been forecasting revenues of ₹48.0b and earnings per share (EPS) of ₹6.90 in 2027. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
View our latest analysis for Chemplast Sanmar
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 19% to ₹298, with the analysts signalling that growing losses would be a definite concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Chemplast Sanmar, with the most bullish analyst valuing it at ₹310 and the most bearish at ₹265 per share. 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. For example, we noticed that Chemplast Sanmar's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 17% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 6.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually. Not only are Chemplast Sanmar's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Chemplast Sanmar dropped from profits to a loss next year. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chemplast Sanmar's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Chemplast Sanmar. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Chemplast Sanmar going out to 2029, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Chemplast Sanmar , and understanding this should be part of your investment process.
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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.