Indigo Paints Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
There's been a notable change in appetite for Indigo Paints Limited (NSE:INDIGOPNTS) shares in the week since its half-yearly report, with the stock down 16% to ₹866. It looks like a pretty bad result, all things considered. Although revenues of ₹7.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 47% to hit ₹2.80 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Indigo Paints' eight analysts are now forecasting revenues of ₹16.5b in 2027. This would be a meaningful 9.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 13% to ₹35.25. In the lead-up to this report, the analysts had been modelling revenues of ₹16.6b and earnings per share (EPS) of ₹39.15 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Check out our latest analysis for Indigo Paints
The average price target fell 12% to ₹1,134, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Indigo Paints, with the most bullish analyst valuing it at ₹1,340 and the most bearish at ₹880 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Indigo Paints' past performance and to peers in the same industry. The analysts are definitely expecting Indigo Paints' growth to accelerate, with the forecast 20% annualised growth to the end of 2027 ranking favourably alongside historical growth of 11% per annum 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 Indigo Paints to grow faster than 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 Indigo Paints. 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. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Indigo Paints going out to 2029, and you can see them free on our platform here.
You can also see our analysis of Indigo Paints' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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