SRF Limited Beat Revenue Forecasts By 5.9%: Here's What Analysts Are Forecasting Next
Last week, you might have seen that SRF Limited (NSE:SRF) released its half-yearly result to the market. The early response was not positive, with shares down 6.6% to ₹2,310 in the past week. Results overall were respectable, with statutory earnings of ₹42.78 per share roughly in line with what the analysts had forecast. Revenues of ₹49b came in 5.9% ahead of analyst predictions. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the 29 analysts covering SRF are now predicting revenues of ₹190.9b in 2027. If met, this would reflect an okay 4.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.6% to ₹82.06. Before this earnings report, the analysts had been forecasting revenues of ₹182.8b and earnings per share (EPS) of ₹80.35 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
See our latest analysis for SRF
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹2,794, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 SRF analyst has a price target of ₹3,606 per share, while the most pessimistic values it at ₹2,211. 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 SRF shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that SRF's rate of growth is expected to accelerate meaningfully, with the forecast 9.2% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 6.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. So it's clear that despite the acceleration in growth, SRF is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SRF following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SRF going out to 2029, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for SRF you should know about.
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