Granules India Limited Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next
Granules India Limited (NSE:GRANULES) shareholders are probably feeling a little disappointed, since its shares fell 5.5% to ₹795 in the week after its latest quarterly results. It was not a great result overall. While revenues of ₹16b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit ₹7.22 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Granules India's six analysts is for revenues of ₹63.3b in 2027. This reflects a reasonable 7.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.6% to ₹29.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹63.1b and earnings per share (EPS) of ₹31.16 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 Granules India
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹907, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Granules India analyst has a price target of ₹1,045 per share, while the most pessimistic values it at ₹588. 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 Granules India's past performance and to peers in the same industry. The analysts are definitely expecting Granules India's growth to accelerate, with the forecast 15% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.0% 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 Granules India to grow faster than the wider industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at ₹907, 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 Simply Wall St, we have a full range of analyst estimates for Granules India going out to 2029, and you can see them free on our platform here..
We also provide an overview of the Granules India Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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